Self-Assessment for BTL - home office as allowable expense

OneAimMan

Bonjour.

That time of the year where I am doing self-assessment and as always, allowable expenses confuse me.

I use my home office (full dedicated room) to manage my single BTL property alongside my full-time job. Most of the pages I have come across, suggest a £208 deduction for the home office use should be claimed e.g. http://landlordmoneysaving.com/home-office-expenses-for-landlords/

Questions:

1. Can I claim £208 as a BTL landlord, or is this more used for people that work from home e.g. self-employed?
2. Is there a minimum number of hours I must be using the office for the BTL to claim the £208?
3. Can I still claim stationary costs e.g. printer ink, stamps, etc on top of this £208?
   I assume the £208 is to include all utilities like telephone and internet costs apportioned to the BTL, but excludes stationary

Clarification appreciated.

Thanks
:money:

TheCyclingProgrammer

The quoted £208/year (its actually £4/week or £18/month) comes from HMRC guidance for employees who work from home.

I’m not sure if this applies to somebody running a buy to let business from home although I suspect HMRC would be unlikely to challenge it.

BoGoF

How many hours a week are you 'managing' your one property? Assuming a long term tenant I really can't see it being more than an hour or two at most.....and that's probably being generous.

How many letters are you sending to be claiming printer ink, stsmps etc?

I do understand some people like ripping the !!!!! out of things though.

00ec25

the chances of it being picked up on your tax return = slim

the chance of it being rejected out of hand for a one property LL, if you are investigated, = 100%. The most frequent caveat is it must be used for fee earning work, not just a bit a admin. That patently is impossible for a single rental property business

I take it your "dedicated room" will be declared for capital gains purposes when you sell your house as it is, by your own admission, a part of the property used wholly and exclusively for business purposes, and therefore does not qualify for private residence relief

OneAimMan

Thank you for the replies.

cyclingprogrammer - this is what I need clarification. Numerous BTL/tax advice pages say it is reasonable for it to be claimed.

Bogof - and that is the crux of my question. How many hours need to be worked for the home office expense to be claimed. Is there a minimum. Your assumption is correct. Hour or two a week if averaged out through the year.

00ec25 - very good spot on CGT implications. Easy to miss that. However, by dedicated room I mean to say one room is an solely used as an office. However, it is ofcourse mixed use which would then mean it thus except from CGT I beleive. It is used for the BTL and also as a study space, and even watching netlfix. Thus I think it comes back to, if a minimum number of hours is required.

Dazed_and_confused

Are you actually liable to pay tax and if so what is the highest tax rate you expect to be liable at on your non savings income?

19/20/21/40/41/45/46%?

buglawton

I had to smile at the idea of expensing a home office for 1 BTL. I manage 2 on a laptop perched on the dining room table and wouldn't think of taking the Mickey that way. But I don't forget to charge mileage to the taxman for landlord call-outs.

Mind you, years ago when my wife worked a 30-40 hour/week at home running 2 online businesses, I made sure her tax return apportioned costs for a home office component of our costs including mobile phone, computer, internet, heating. Etc.

Sibbers123

I agree with 00ec25.

The £4 per week is for employees working from home. The rate for self-employed is dependant on the number of hours spent working at home. However, renting one property is neither an employment or self-employment so the flat rate does not apply.

OneAimMan

Yes, even though it is unlikely the relative small value would be flagged in a larger expense list, I think the key issue is the number of hours. Further research online suggests a minimum of 25 hours i.e number of properties > 1. I'd still be interested to know if a distinction is made between employment/self-employed and how a BTL is classified.

BoGoF

The £4 a week (originally £2) was originally introduced for employees who were required to work from home. If you work from home voluntarily then you could not claim.

00ec25

OneAimMan wrote: »

I'd still be interested to know if a distinction is made between employment/self-employed and how a BTL is classified.

employment is employment
self employment is trading
BTL income is property (investment) income and is expressly neither employment, nor trading. It is a category in its own right, which is why there is no automatic overlap of "expenses" and "tax relief" on the other categories of taxable income.

a 1 property BLT rental business cannot possibly justify even £4 per week use of home expenses. It might justify 1 or 2 weeks per year, but certainly not anything significantly more than that

note the following (my bold):

Where a specific part of their home is used exclusively for running the rental business for a significant amount of time, whether continuously or at particular times, then a proportion of all fixed expenses referable to that room may be deducted.
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2100