Working from Home: What Can I Claim?

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A lot of businesses start from the kitchen table, the corner of the spare room.  The reality is that unless there is a massive pot of cash to get you started then most businesses just can't afford premises from the word go. There are also plenty who are more established who may be able to afford them but make an active choice to remain home based as it suits their life better or they have the room so why not use it rather than line someone else’s pockets.

So, if you work from home can you put any costs for this through the business? The short answer is YES! (That's what you wanted to hear, right?!). There are two options:

  1. The set rates per HMRC - these are based on the hours worked per month and the latest rates can be found here
  2. Work out the cost and put that through the business.  To do this you need to look at the amount of space you use (i.e. 1 room out of 4, kitchens, bathrooms, halls are ignored for these purposes), you need to look at the amount of time you use them and you need to look at your bills (mortgage interest or rent, utilities etc.) and then you can work out the proportion of cost that you can claim.  It often works out as less than you expect once you have factored in space used and hours.

We always work out both for our clients to see which is best for them to claim and unless there's a significant change in your circumstances then you will know which option to stick with.

It's worth noting that having a dual purpose to your home office is generally recommended so that it is still part of your house, otherwise you run the risk of part of your home being subject to capital gains tax on any future sale (although it would hopefully be covered by the annual allowance, but nothing in life can be guaranteed).

Rachael Savage