Working from home business expense

slhqoue

Thanks for this - very interesting. Although it does mean I'll be claiming less: the simplified amount for working 25 - 50 hours a week at home is £10 per month (£120/year), whereas a rough calculation I did previously showed that I'd use 4.16% of my time working at home (7 hours a week out of max 168 hours in a week) = £24.96 of rent per month = £299.52.

So I'd be claiming a lot less if I choose to use simplified expenses. But it might just be easier.

PasturesNew

There is a calculation, that normally works out so small it's not worth the hassle.

It's the %age space you use, in the %age of time, based on these figures:

Say the flat's got a total floor space of 500 square feet.
Rent is £600/month
There are 24 hours/day
You use a deskspace in the corner of one room - 5'x3' = 15 square feet
You work for 20 hours/month

Now calculate how much of a proportion the space is for the time you use it.

The bigger your house and the smaller your space, the less you can offset. Doing the same work in a mansion is 1p or in a bedsit £5.


15' out of 500' is 3% of the space
20 hours/(30*24) is 3% of the time

slhqoue

Hmm, so in summary it may actually be worth just using the simplified amount I guess!

yarly

Indeed. Here are some more examples of how to arrive at a reasonable figure:
www. hmrc .gov .uk/manuals/bimmanual/bim47825.htm
(remove spaces)

slhqoue

To summarise, it seems like there are two options:

1. Simplified expenses - I can claim £10 a month / £120 a year

2. HMRC "Tax relief for household expenses" - I can claim £4 a week without providing documentary evidence / £208 a year

So surely option 2 is better!

EDIT: Although it seems option 2 is actually for expenses incurred working from home as a full-time employee?? I'm so confused!