Home office expenses for self-employed

debtfreeandlovingit_2

Hello,

I am self-employed working pretty much full time (8 hours a day, 5 days a week) from one of the three rooms in my home, which I rent with a joint tenant. Bills are obviously shared equally.

I wonder if anyone could tell me the whether, when working out the total household expenses, including rent, council tax, electric, insurance, broadband, etc., I take the total household expenses or just my half? I worked out that I use one of the three rooms about a quarter of the time, so I am looking at dividing the total by 12 but this seems very high at about £1600, unless I halve it again to just include my half of the expenses. Even £800 seems a little high to me. Does this seem reasonable, considering I live in a 2 bedroom flat in SE England?

Many thanks,
David

jimmo

In my 2 bedroom flat we had a kitchen, living room, bathroom and the 2 bedrooms. For tax purposes I would ignore the bathroom and regard it as a 4 roomed property

There’s no real logic to that, its just how I recall we used to do it when I was a taxman.

Subject to that, your calculations of the cost of running your business from your home seem to be perfectly logical but, from what you have posted, I can’t help the feeling that your flat-mate is subsidising your business.

From your own figures the cost of running your business from your home is £1600. If you paid that and split the remaining costs 50:50 that would be fair to your flat-mate and you could legitimately claim the £1600 as a business expense.

A fundamental principle of taxation however is that you can only claim your actual costs so you can only claim the half that your are actually paying, £800.

debtfreeandlovingit_2

Jimmo,

Many thanks for taking the time to reply. This sounds perfect!

David