UK tax return - what is a reasonable % of time for home cost?

Question

I am self-employed and work from home.  I wish to claim some of my home bills as expenses.  I have read the HMRC notes and they say you can claim a proportion of your bills, based on the area of your home that you work in and also the proportion of your time that you are working.  So, can someone advise me on what is normal.  If, say, I was working 30hrs a week in one room that comprised a quarter of the house area, what proportion of the bills can I claim?  For the time element, is it 30 hours out of a total of 7 x 24 hours? Or 30 out of a total of all waking hours?  Thanks for your help.

Anonymous · Accepted Answer

If the room is not exclusively used for you business, you can only claim the costs when it is being used for business and for no other purpose.  If you work 30 hours per week, the proportion will be 30/168.

You need to be aware though that if there is any other use of the room at the same time, such as your partner or child watching TV, or just being in the room, then the room is not being exclusively for the business.  You would need to narrow it right down to the actual area being used - probably no more than the size of your desk.

Anonymous · Answer

This rule may have changed but at one time once you have claimed that part of your home is used exclusively for your business when you sell that home then then that business  part is liable to capital gains tax as it was not your residence.
Some mortgage companies have rules about using the property for business too.
It may also affect your property insurance.
Being really picky you may have to pay business rates on that part of the building.

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UK tax return - what is a reasonable % of time for home cost?

2 Answers