Advice on expenses - wfh, self assessment, UC

elsiejane

Hi,

The tax year 20-21, I was newly self-employed working from home so ended up claiming Universal credit from May - October 2020, as I wasn't eligible for the Covid relief packages. I then became fully employed PAYE in November of 2020 and still am.

When claiming Universal Credit, I submitted my income and expense on a month by month basis. The only expenses I declared was the simplified expenses on my rent - suggested on the gov.uk site -  £18 a month for the hours I was working. I pay £799 a month, all bills included in a shared property (The only space that isn't shared is my bedroom, which is where I work)

I am now completing my tax returns for that period of self employment and I realise I grossly understimated my expenses at the time.  £18 doesn't seem anywhere near close to a fair proportion of £799.

Two questions: What is a fair amount, or formula, to claim with regard to expenses for rent, bearing in mind all bills are included?
and
Can I claim a different amount to the rent expense of £18 a month on my universal credit claims, of the (moreorless, give or take a month either side) same period?

Thank you for your help, in advance.

Jeremy535897

If you want to move away from the simplified expenses figure, this article gives some indication of what you can claim:

https://www.freeagent.com/guides/expenses/business-use-of-home/

If you worked from home for say 70 hours a month for 11 months of the year, then you might work out a claim along the following lines:

Annual rent £799 x 12 = £9,588
Proportion of rent applicable to bedroom say 40% = £3,835
Time spent working 770/8760 x £3,538 = £311 (some elements of the £799 will be less during the night than during the day, but not the biggest expense, the pure room rent)
Compare with £18 x 11 = £198

You will have to go through your own figures. What you treated as expenses under UC is bound to be less than or equal to what you will claim under SA, so I doubt there would be an issue for UC.

elsiejane

Thank you for your quick and full response. That's very helpful.