Working From Home Expenses
Chrissy Leach • 11 November 2024
If you’re self-employed, you may be working from home, and you’ll likely have increased household costs as a result. How much can you claim against your business profits?
There are two options for claiming:
Proportion of actual costs
You can claim the business proportion of your costs for things like:
- Gas and electricity
- Water
- Council tax
- Mortgage interest (not the capital repayment) or rent
- Internet and telephone
You’ll need to use a reasonable method of dividing your costs, for example by looking at the number of rooms you use for your business and the time that you spend working from home.
It’s important to keep records of the costs and the method used to divide the costs in case HMRC asked to see it.
Also note that if you have rooms that you use solely for your business, this may effect your eligibility for private residence relief where you own your home so it’s a good idea to also have personal use of the rooms if possible.
Simplified expenses
You can avoid the complex calculations above by using simplified expenses which is a flat rate based on the number of hours you work from home each month. You do not need to prove any costs to HMRC as they have set the rates, although you may be asked to justify the number of hours if HMRC believe them to be inflated.
The current rates are as follows:
25 to 50 hours £10 per month
51 to 100 hours £18 per month
101+ hours £26 per month
Each month should be calculated separately so if you take a holiday one month, you may need to claim a lower amount that month.
Conclusion
Make sure that you’re making a claim for your home working as it will reduce your tax bill. Contact us if you’d like any help with your self assessment tax return.
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