Tax Return - Working From Home

steve_clemo · 24 June 2005 at 10:47PM

I have been reading MSE for many months but never posted before, so here goes.

I am trying to complete my tax return at the moment, but I now have the added complexity of claiming for working from home. I have a dedicated office and claim telephone costs, but no other costs.

I would therefore claim this off my tax bill.

Any ideas on:
How much can I calim?
What expenses can I include?
Where do I include this information on the form? (I have always completed my form on paper, but would like to do this on-line)

I have seen this subject come up before, but there did not seem to be a definitive answer

Thanks.

Poppy9 · 24 June 2005 at 11:21PM

Even if you have a dedicated office within your home you can still only claim 10% of your utility bills. If you have a separate telephone line just for the business (and I think you need to be paying business rental which is much more than residential) then you can claim it all.

The self assessment notes of guidance have notes on what is eligible expenditure for supplies and services etc. Even though PC's are cheap now they are still counted as capital expenditure and you cannot charge the full cost into one year (you depreicate over 3 - 5 years). If you use your car etc for your work, excluding travelling to and from work place, you can claim petrol and a % of other overheads.

A few points to note when working from home you have to inform your mortgage company - (its in the small print), Home Insurers & Car Insurers..

If you complete on line no silly wrong box input errors will be picked up quickly.

Cook_County · 25 June 2005 at 8:23PM

You do not say if you are employed or self-employed.

If you are employed, does your contract of employment say that it is mandatory you must work at home?

If you are self-employed then the business use of utilities is likely to be much greater than 10%, while capital allowances would be claimed on the business use of the computer.

steve_clemo · 25 June 2005 at 9:56PM

Thanks for the feedback so far.
I work for a software company and I am based at home as I live in Manchester and the company is based in London.

Poppy9 · 25 June 2005 at 11:36PM

Steve,

Are you sure you are classed as Self Employed in the IR eyes.

Check out their website they have a list of questions for you to determine your status.

Inlandrevenue

Also check out this FT article on homeworking - there is an interesting note at the bottom re claiming for home bills and CGT liability.

FT

Cook_County · 28 June 2005 at 9:57PM

it did the same for me so i used another of my email aliases!

Richie(UK) · 29 June 2005 at 10:26AM

Steve,

Be very wary of saying something like "I have a dedicated office" to the Revenue.

When you sell your main residence any profit made is (provided certain conditions are satisfied) exempt from Capital Gains Tax. However, if you have a room that you have said is used solely for business purposes then it is possible that the Revenue will argue that the proportion of the gain attributable to this room does not qualify for the exemption.

It may be that the level of any gain, once apportioned and after using your Annual Exemption, is not high enough to warrant a CGT charge - but why give them the opportunity to even query it? By all means make a claim for your reasonable home costs, just don't say that the room is used only for business purposes.

Tax Return - Working From Home

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