Self Employed- claim for use of the home

Many small businesses are based at home. If you work from home it is possible to claim a reasonable amount for using a room or rooms at home for business purposes. Costs might include part of the bills for heating, light, water, and mortgage interest.

If you are doing this on a small scale and don’t have all the expense receipts to arrive at an exact figure, it is usually acceptable to claim a modest flat weekly amount provided this is reasonable. You could base it on a sample costs for one month or quarter perhaps. If the home is used for only a few hours a week (e.g. by a builder who does his paperwork at the weekends) then a reasonable claim might be perhaps something between £2 and £5 – per week (i.e. between £96 – £240 per annum, for working 48 weeks a year).

If the claim is going to be higher than this then it is important to keep original bills or evidence of amounts paid and the basis on which the proportion has been calculated.

Note: If you use a room in a home you own, ‘exclusively’ for work, this could reduce the Capital Gains Tax private residence exemption when the property is sold. This is because any part of the property exclusively used for business will not qualify for Capital Gains Tax private residence relief. This problem may be avoided by ensuring there is some domestic use of the study (e.g. keeping a second TV in the study, and using it from time to time for personal enjoyment).

Economia