What Tax Expenses Can You Claim For A Home Office?

Do you run your business from home?

With more and more of us working from our home office, small business owners are increasingly finding that they incur expenses to operate their business from home.  Whilst there are a number of tax expenses that can be claimed for running your company from your back room, there are also some items that cannot be claimed.

Here’s our guide to what tax expenses can, and cannot, be claimed.

Tax expenses for a home office

In a nutshell, tax expenses are available for the additional household expenses that you incur when running your business from home.  These include:

  • Gas and electricity costs (for heating/lighting etc)
  • Business telephone calls
  • Use of broadband for business purposes

When calculating what proportion of your electricity or gas bill is the ‘business expense’, you would normally look at the proportion of your home that you use for business.  For example, if you use one of eight rooms to run your business, you would normally claim a tax expense of ‘one eighth’ of your electricity or gas bill.

With regard to mobile telephone and landline calls, you can normally determine what proportion of these calls are business related through an itemised call statement.

Clear demarcation

It is important that you have a clear demarcation between what expenses are incurred for business and personal use.  For example, if you use your broadband for both personal and business use, you must have a clear way of determining what part of that expense is business related.

HMRC also make it extremely clear that you are not entitled to claim tax expenses on domestic expenditure that you might pay.  For example, you cannot claim tax relief on your mortgage repayments or council tax, even if you use your home as an office.

Claiming expenses

There are two ways of claiming tax reliefs for the expenses of working from home:

  • A flat weekly rate (not including business telephone calls)
  • A larger amount if you can show how you calculated the figure

3 comments

  1. Vincent says:

    A flat weekly rate (not including business telephone calls).

    How do you work out this flat weekly rate? Is it the same regardless of the size/cost of your home?

  2. john doyle says:

    up until the end of 2003 i had always claimed for a tax allowence for overalls and tools for my job.i was made redundant in december 2003.although i found a new job doing similar work within a few weeks my tax code was altered so i was not getting the overalls and tools allowance.i had not noticed this change until a workmate told me my tax code was different to his although we have the same status9 as in not married and have no children. he said he is still getting this allowance and also a travelling allowance as he comutes 26 miles a day to work. i also travel to work and do more than the 26 miles which he does a day.could a get both the allowances and also get them backdated from february 2004.

  3. Anonymous says:

    What tax expenses can be claim for an Limited Liability Partnership

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