Can home running costs be claimed if working from home?

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working from home

Lots of our clients ask about running costs when working from home. Here we have put together an article that will hopefully widen your knowledge on this. Firstly, this can depend on whether you’re the director of a company or a sole trader:

 

Directors use of home:

HMRC will allow a flat rate of £18 per month without the need to maintain receipts or bills.  Simply put an expense claim into the company, much like you would if you were employed by another company. Alternatively, HMRC will also allow a flat rate of £4 a week. The totals for the year are £216 or £208 respectively.

 

Sole traders use of home:

From April 2013 you may claim a fixed rate for use of home. The rate applicable is based on your calculation of the number of hours that you work at any homes “wholly and exclusively” for the purposes of the trade.

  • 25 to 50 hours worked per month – £10/month
  • 51 to 100 hours worked per month – £18/month
  • 101+ hours worked per month – £26/month

 

The alternative calculation is the actual calculation: A proportion of household running costs (Mortgage interest or rent, council tax, water rates, insurance, broadband, electricity and gas, repairs (to workroom only) can be claimed based upon the number of rooms and hours spent working at home.

 

We could calculate this for you, but often the fixed rate allowance is comparable.

 

Other expenses

The cost of any equipment or consumables wholly necessary and exclusively for work (office furniture, stationery) can be claimed.  Any costs with a personal usage element are unlikely to be allowable expenses.

 

If you would like to ask any questions on this or find out more, please contact us or call 0161 236 7677.