• John Massey

Working from home 🏠 tax allowances

If you're self-employed and work from home, you'll incur additional home running costs on which you can claim tax relief by following these rules.

work from home, what you can claim

HMRC allow you to claim via two methods:


Option 1(a) (for Sole-traders and Partnership): Claim a flat rate expense of £10 - £26 per month (depending on the number of hours working from home): https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home


Option 1(b) (for employees, possibly including directors): Claim a flat rate expense of £6 per week only if your employment demands that you work from home. In practice, this rarely applies to directors of their own limited company: https://www.gov.uk/tax-relief-for-employees/working-at-home


Option 1 is most appropriate if you don't have a dedicated home office (e.g. you use the kitchen table) or you simply don't want to prepare the workings required for option 2 below.


Option 2: Calculate the actual business proportion of your home running costs and rent your home office to your business: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim47825


Option 2 is most appropriate if you have a dedicated home office/workspace where you spend most of your working time.


To implement option 2, you'll need to:

  1. Prepare workings (download the appropriate file below)

  2. Have a signed rental licence agreement in place (we can provide a template to clients)

Use of Home Workings SOLE-TRADER or PARTNERSHIP
.xlsx
Download XLSX • 22KB

Use of Home Workings LTD CO
.xlsx
Download XLSX • 24KB


Would you like help to pay less tax? Feel free to get in touch or check out our related posts 👇


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