With the rise of work-from-home culture in the work place, there are more and more people entitled to claim expenses related to working from home. This article aims to help you through this process. If you just want a quick calculation, why not see our U.K. home-office expenses calculator.

If you would like to know more about how to calculate your work-from-home related expenses, get in touch!

If you work from home, there are a number of expenses you may be entitled to. Every day we speak with tax filers who are not making the most of their claimable home expenses. 

Read on to find out more about the home expenses you may be able to claim on your tax return this year. 

For a quick calculation of the amount you maybe be able to claim, use our U.K. home-office expenses calculator. 

For a review and tailored advice on how to maximise your expenses book a call with one of our expense optimisation accountants.

Working from home allowance is claimable by self-employed professionals. Home expenses can also be claimed by companies. Those who are employed only can often discuss claiming with their employer to ensure maximum tax savings. 

Only the portion of the expense that exists solely for work purposes can be claimed. Therefore as home expenses are nearly always used for part-personal reasons, the expense is only part-claimable.

Home expenses that can be claimed include, but are not limited to:

• Heating

• Electricity

• Council tax

• Mortgage interest or rent

• Internet and telephone use.

Calculating your claimable home expenses 

One method for calculating how much you can claim is to divide the number of rooms used for your business by the total number of rooms in your home.

SIMPLIFIED EXPENSES

It is also possible to claim allowable expenses without requiring time-consuming calculations and record-keeping. This method of claiming deductions is based upon a flat-rate method rather than calculating each expense. 

Flat-rates for working from home 

Allowable expenses can be calculated by using a flat rate based on the hours you work from home each month. 

It is important to note that the flat-rate method does not include telephone or internet expenses and these need to be calculated separately. 

You can claim the business proportion of these bills by working out the actual costs. 

You can only claim work-from-home expenditure if you work for 25 hours or more a month from home.

• 25 to 50 Hours:  £10 flat rate per month

• 51 to 100:  £18 flat rate per month

• 101 and more:  £26 flat rate per month

Flat rates for living on your business premises You can also use simplified expenses if you use your business premises as your home. An example of this scenario would be businesses such as bed and breakfasts, guesthouses, or small care homes whereby you reside on the site of your business. Instead of working out the split between private and business expenditures regarding the use of the premises, a simplified expense rate can be applied. To calculate the claimable spending, you must first calculate the total expenses for the premises and then apply the flat rate to subtract for your personal use.

• 1 person:  £350

• 2 people:  £500

• 3+ people: £650

For example, you and your partner run a bed and breakfast and live there the entire year. Your overall business premises expenses are £15,000.

Flat rate: 12 months x £500 per month = £6,000

You can claim: £15,000 - £6,000 = £9,000

If someone lives at your business premises for part of the year, you can deduct only the applicable flat rate for the months they live there. For example, you and your partner run a bed and breakfast and live there the entire year. Your child is at university for 9 months a year but comes back to live at home for 3 months in the summer.

Flat rate: 9 months x £500 per month = £4,500

Flat rate: 3 months x £650 per month = £1,950

Total = £6,450

You can claim: £15,000 - £6,450 = £8,550

USE OUR CALCULATOR

You can calculate your potential home office expenses with our U.K. home office expense calculator

NEED MORE HELP?

Working out your expenses can be a tricky task, especially if you run your own business. We offer expert tax advice for professionals across the UK. For more information bespoke to you, do not hesitate to contact us