We have a number of clients who either work from home or at least spend part of their working week based there. So what are the current rules for what can be claimed?
Where part of the home is used exclusively for business for at least some of your working week, a deduction can be claimed to allow for the cost of working from home. The costs that can be claimed include both fixed costs and variable costs. Fixed costs are items such as rent, council tax, mortgage interest (excluding capital repayments), insurance and cleaning. Examples of variable costs are electricity and gas.
The factors to be taken into account when apportioning the allowable expenses include:
Area: what proportion of the floor area of the home is used for business purposes?
Time: how long is it used for business purposes, as compared to any other use?
Usage: how much is consumed for business purposes, e.g electricity
If a reasonable cost is claimed based on the facts, then HMRC will accept the claim. To give an idea of what is likely to be classed as reasonable, HMRC have provided some examples here
From April 2013 sole traders and partnerships have the option to use simplified rules where the amount that can be claimed each month is based on the number of hours spent working from home. Using these rules there is no need to keep track of actual expenditure incurred.
• 25 – 50 hours – £10 per month
• 50 – 100 hours – £18 per month
• over 100 hours – £26 per month
If you require help in determining how much to claim, please get in touch with us at Embarc.