Use of home as office calculator
The calculator below is aimed at the self employed and at company directors, although any employee can make a claim, providing they are required by their employer to work from home some or all of the time.
You can submit a backdated claim for up to 6 years so its definitely worth doing! Ask us
For a long time, it was commonly accepted for individuals to charge a nominal £2 per week (up to 07/08) and £3 per week (from 08/09) as a notional tax deductible expense in respect of using a room within their home for business. This can still be claimed where the business use of an individual’s residence is insignificant – e.g. writing up a cashbook on the kitchen table.
HMRC Business Income Manual (BIM) 47800, states that where there is significant business use of an individual’s home (say, the use of a study or a bedroom as a business office), then it is appropriate to claim a proportion of the actual running costs of the home as a deductible expense.The amount claimed should be backed up with calculations, and that is the purpose of the calculator below. It is important to ensure that the details of annual expenditure and business use proportion of the room (which can be based on hours exclusively used for business or floor space to create a BU%).
If a room is used exclusively (100% of the time) for business purposes, then capital gains tax will become chargeable on that room when the property is sold (as the ‘principal private residence exemption’ is lost). However a room used less than 100% of the time for business purposes is not affected at all.
A sole trader or partner can claim the use of home figure as an expense in their accounts.
However where the charge is to be made by a director to a limited company there are 2 options for home expenses:
1) S336 expense claim – £3 max per week, unless a higher weekly amount can be justified and agreed with HMRC (unlikely)
The company is charged rent. It is recommended that a lease or ‘licence to occupy’ agreement is signed, otherwise HMRC may argue that the amount paid is not really rent.
If option 2 is used, on the directors’ personal tax return, an entry should be made within the land & property pages to reflect the rent received and the individual cost components to give a £nil profit in respect of the rental income.
Enter your own figures into the calculator below to see what you might be able to claim:-
If you use more space in your home, perhaps another bedroom, or the garage for storage, then yes, you can claim for this space also.
