Work from home part time - how much can I claim?

vertex

Hi. I am registered as self employed and work from home about 30% of my time. I would like to claim a flat rate for using my home as an office (rather than work out a proportion of bills, number of rooms used etc...). What would you say is a fare amount (ie one that wont prompt a tax investigation). I have spoken to an accountant and they have said £7 per week. That sounds excessive (I also have a full time PAYE job, thats why I only work 30% of my time at home) and Im responsible for my accounts and so I want to get them correct.
Any advice would be appreciated.
Thanks

vertex

Im just thinking in terms of hours per week I actually work from home. I would say its around 25 hours per week I spend working from home.

DJBenson

Isn't there a notional amount (£4/week) you can claim for "use of home as office" without submitting receipts etc. to HMRC?

Outside of that, you'd be looking at apportioning part of your home as business premises which opens up a whole can of worms in terms of insurance and if/when you sell your home.

vertex

Yes, I seem to remember reading something about being able to claim a notional amount. One accountant said £7 would do, however Im well aware that the figures entered on the SA form are my responsibility, so Id rather err on the side of caution. I wonder whether I could claim the full £4/week safely, or whether I should claim 30% of £4/week (because I work an estimated 30% of time at home).

Dal_Whinnie

The Revenue guidance for employees who are required to work from home is currently £4 per week. If you are self employed and working from home then it would not appear unreasonable to use a similar amount. On the basis that the allowance is to cover the additional costs you incur by working at home then taking a proportion of this amount would appear reasonable if you only work at home part of the time. You might well decide that it isn't worth the candle.

Having said this, it would make sense to consider the additional costs you incur to see if this amount is reasonable or not. This would include light and heat, telephone, broadband but does not include items you would be paying anyway (such as council tax).

You don't say whether you are trading through a company or not but if you are then you should agree a charge with the company and then include this amount as income on your tax return and claim your costs against this. The alternative would be to claim the relief as an employee of your company. You would then need to ensure you comply with HMRC guidelines.

vertex

Ive worked out that I work consistently 20 hours a week from home (Im self employed AND have a fulltime job). Just as a comparison to the nominal flat weekly rate, Id like to work out costs based on the percentage of household bills.

This should be straightforward: would I work out what percentage my 20 working hours is to a normal 48 hour working week OR what percentage 20 hours is to the full 168 hour week?

sweetietot

vertex wrote: »

Ive worked out that I work consistently 20 hours a week from home (Im self employed AND have a fulltime job). Just as a comparison to the nominal flat weekly rate, Id like to work out costs based on the percentage of household bills.

This should be straightforward: would I work out what percentage my 20 working hours is to a normal 48 hour working week OR what percentage 20 hours is to the full 168 hour week?

Not really, because you wouldn't start with 100% of household bills as you are probably not using the whole of the home.
Usually if a percentage is claimed for a home office, you have to divide bills by number of rooms (not including kitchen & bathroom, I believe?) So if you have 3 bedrooms a living room and dining room, but you use one of the bedrooms as your office exclusively, you could possibly claim 1/5 but someone more knowledgeable would be able to confirm this

vertex

Thanks - what you say makes sense. I dont actually have a room that I use solely for work, I just use my bedroom. I have a small house: 2 bedrooms, 1 lounge, 1 bathroom and a kitchen. Because I dont have a dedicated office room its likely to be less than 1/5.

Can anyone else shed more light on this? What would be deemed reasonable - based on these facts - by HMRC?

Thanks in advance.