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Can I claim costs for working from home?

April 19, 2024

In short, yes you can. However, there are 2 possible ways of approaching this. 1 of the ways is a little complex to work out, but the 2nd way is super simple.

So let's tackle the more complex way 1st...

Step 1: Count all the rooms in your home.

What counts as a room?

HMRC says that you should count

'normal living spaces' as rooms,

so we are excluding any hallways or bathrooms in our calculations.

I have a garden room- how should I count it?

If your garden room is included in your home's bills and is heated, you can count it as another room.

Step 2: Identify the rooms your work in & for how long.

How do I calculate the percentage of use?

Calculate the percentage considering the total number of hours that you spend in a room. For example, if you use your living room for 10 hours in a day & spend an hour a day doing work in it, your business usage of the living room would be 10%.

Step 3: For each bill, evenly divide the cost by the number of rooms.

What costs can I include?

Heat.
Mortgage payments/ rent (only the interest on the mortgage, not the capital amount).
Home insurance (if it also covers your business).
Repairs & cleaning bills that apply to the whole house.
Council tax.

Tip:

Alternatively, you could base your room costs on floor space.

Calculate the percentage of floor space for each room, and divide the total cost by that percentage. For instance, if your bill is for £300 and your office takes 10% of your overall floor space, the room cost would be £30

Step 4: Apply the percentage of work use to the relevant room costs.

Step 5: Enter the total business usage amount into your accounts.

Or the super simple way...

This way is the 'Simplified expenses' way (as it's called by HMRC).

You can only use this method if you work from home for more than 25 hours per a month. You can't use a combination of your actual expenses (the 1st method) & the Simplified expenses; it's 1 or the other!

All you need to do it look at the table below:

Want to know what other expenses you can claim as a sole trader?

I've written a blog post on it, here it is: 'As a sole trader what business expenses can I claim?'

Home office expenses

Working from home - what expenses can I claim