Working from home business expense

slhqoue

I will be working on some books as a freelance development editor while also working full time. I'm wondering whether I can claim back any of my monthly rent as a legitimate business expense. It would obviously be a small percentage of the total but I was wondering if there's any guidance as to how much is a reasonable amount. I will mostly be working on the books at evenings / weekends, although possibly one day during the week as well.

PlutoinCapricorn

It is a good idea to read what HMRC has to say, especially the examples. Rent is mentioned here but you do need to estimate the business proportion, which is less than it would be if you worked from home full time.

http://www.hmrc.gov.uk/incometax/relief-self-emp.htm

Caz3121

does your lease allow you to run a business from the property?

slhqoue

I must admit I have no idea. "Running a business" sounds like a rather grandiose term for what is a small amount of editing work I'll do from home. Are you suggesting unless I've cleared this with the rental company I shouldn't claim it with HMRC?

PlutoinCapricorn

The point about "running a business" from home comes up regularly on here.

If you are just doing online or paper work, there should be no problems - unless you advertise and give the home address.

slhqoue

No, I won't be advertising or giving out my home address - it will just be paper work and occasional Skype calls.

I really want to know a minimum I can claim, giving that I'll be doing this for around 12 months it will add up. Maybe something arbitrary like £5 a week?

p00hsticks

slhqoue wrote: »

Maybe something arbitrary like £5 a week?

If you were working from home as an employee, HMRC have a figure of £4 a week that can be claimed without having to supply any supporting evidence.

http://www.hmrc.gov.uk/incometax/relief-household.htm

Note that the intention for this is to cover costs such as additional expenses incurred when workng from home such as increased heating and lighting bills. The link abouve specifically states that you CANNOT claim in respect of expenses that you would have incurred anyhow such as mortgage (and by extension, rental) payments.

Nto sure how that translates into self employment

slhqoue

That makes sense - after all, I'd still be paying the rent even if I wasn't doing the freelance work.

Claiming £4 a week for lighting and heating makes sense thought - over a year that adds up to a bit of tax relief.

Maybe I should just do that and leave the rent out of my freelance expenses.

PlutoinCapricorn

Yes, there is a "no questions asked" amount for employees who are required to work from home, but one of the advantages of being self employed is being able to claim more than this.

I think you would be cheating yourself if you don't claim whatever you are entitled to. HMRC used to do free workshops on this subject.

It seems that you have not registered yet: the tax return for 2014/15 is a long time in the future, which gives you time to do some calculations and investigations.

slhqoue

True. I just wish it was a bit clearer! I just want to claim an appropriate amount given my rent and bills and the time I'll be working from home.

But it doesn't seem to be this easy.

yarly

I can't post links, but google "simplified expenses" - this is a new scheme introduced in 2013/14 which might be suitable for you.