Working From Home – What Can I Claim?




Shore Accounting provides bookkeeping, accountancy, tax and business coaching services to small businesses and individuals in Sussex and across the country. Their unique approach provides not only an accurate set of accounts and reduced tax bills, but also brings the numbers to life to provide practical ideas on how you can grow your business.

Are you one of the many self-employed people who work from home?

If you are, then read on as we give you some ideas about how you can save yourself money by claiming some of the running costs of your home against your tax bill. As a small business accountant, we complete many tax returns and often find ways to save people tax or get tax refunds from previous years as they have not claimed all of the allowances possible.

Here we will look at a few of the things you can claim if you work from home.

As someone who is self employed, you are entitled to claim any expenses that are incurred “wholly and exclusively” for the purposes of business. So basically, if you spend money relating to your work, you can claim it against tax.

If you work from home, you are incurring costs such as heating and lighting so can use some of these costs to reduce your tax bill.

There are two ways of doing this:

The Flat Rate method

This is the simplest way of claiming expenses and looks at how many hours you spend per month running your business from home. You can then claim a fixed amount in your accounts for use of home as follows:

25-50 hours per month: £10 per month

51-100 hours per month: £18 per month

101 hours+ :£26 per month

You need to take care as there are some restrictions on who can use the flat rate method. You also need to be aware that the allowances changed in April 2013.

Actual Costs

If you cannot or don’t want to use the flat rate method, you can claim a proportion of the actual costs of your household bills. The amount you can claim depends on what work you actually do from home, for example if you only write up invoices from home but spend the rest of your working time at customer’s properties you can claim less than if you work at home full time.

In the calculations you can claim a proportion of mortgage interest, rent, council tax, lighting and heating, telephone and broadband, property repairs and utilities.

Like all things tax, it’s not as straightforward as it seems but if you get in touch we can send you a FREE use of home as office calculator to help you out.

If you run a limited company from home it works a bit differently, but you can still claim a proportion of your costs and it is one of many ways you can extract money from your company in a tax efficient way.

If you would like to contact Ruth for advice feel free to give her a like/follow!

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