Can I claim for home costs in my tax return

Ginger_Winner

I'm self employed and work from home 80% of the week. I'm filling in my self assessment tax return and was wondering if I can claim a proportion of the costs spent on my home as an expense...

I live in a top floor flat - 20% of which is my office, so I was wondering if I'm able to claim for example, 20% of the cost of loft insulation that I have had put in, or 20% of the service charge?

If someone would be able clarify the rules on this I would be really grateful....

mjm3346

Just a thought. Declared for business rates? Approval for business use? Gain (if any) on a sale taxable as a business gain?

MrRedundant

You have 2 options really

Flat rate of £3 PW
Or the added costs due to you working from home. Some people use proportions but this can be risky. I do not for a second think they will allow you to claim 20% of the costs of improving your home etc.

You at a push could maybe get 20% of bills etc and some CA but I think your on sticky ground and you might find adverse outcomes of declaring it as business premises especially so much so.

morgani

As far as is acceptable with HMRC there are two options:-

1. You can claim a flat rate of £3 per week which is often suitable for those who just do some odd invoicing etc at home.

2. You can claim a proportion of running costs based on either area or usage (often the simplest being number of rooms). Effectively come up with a cost per room and then the % it is used for business then this is what you can claim.

Some examples from HMRC are here http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm

You do not need to inform the council that you are running a business from home unless you are having a large impact such as employees and lots of additional traffic and even then it may be unnecessary. So as to avoid complications with CGT you also need to consider not using a room exclusively for business.

These are all things that any good accountant can help you with particularly as to what rooms to or not to include in the calculation and also as to which costs and also on which method of apportionment.