Need a supportive Accountant?

Use of the home for business to reduce tax.

Use of the home as a business expense is a very important expense that can save tax.

This is very confusing to most business owners.

Some business owners are of the opinion that they can claim all expenses that relate to their house while running their business.

Expenses such as my mortgage, my electricity, my gas, etc.?

There are so many misconceptions out there.

So in this blog, I’d like to make some clarifications because an individual could actually get you into trouble if they claim too much or too little business expense.

According to HMRC leading cases, a self-employed business will not be working effectively from home if they have a base of operation elsewhere.

Such places like as an office or shop cannot claim using a home as an expense.

Use of the home

Expenses that could be claimed by an unincorporated business owner for use of the home.

A business owner may be able to only claim a portion of their home expenses for use of the home.

Expenses such as heating, electricity, mortgage interest or rent, council tax, internet, and telephone.

The business owner would have to apportion these expenses reasonably by apportioning using the number of rooms in the house and the amount of time spent using the room in the home.

Other ways of claiming the use of the


HMRC has also provided simplified ways for claiming the use of a home as an expense.

They allow business owners or taxpayers that work from home to claim based on the flat rate of hours working from home each month.

This would be easier as they wouldn’t have to prove the reasonability of the portion of the home and the amount claimed.

This expense can only be used by a taxpayer that works from home every month for at least 25 hours.

The Flat rate amount to claim monthly.

Hours                                                           Flat rate.

25-50 hours per month                                           £10 per month.

51-100 hours per month                                         £18 per month

101 and more                                                            £26 per month

Claiming use of the home when you live in business premises.

Some individuals do have to live in their business premises, Examples of such people are pub landlords, Shop owners, bed and breakfasts e.t.c.

In a situation where the majority of the expenses relate to the business itself, business owners could also apply a flat rate.

This might be an easier way of calculating the private element of the expenses rather than apportioning the private element of the expenses.

The flat amount would be depending on the number of individuals living on the premises.

The Flat rate amount is deducted from the premise’s expense use of the home.

1 Person                                                                            £ 300 per month.

2 people                                                                           £ 500 per month.

3 or more people                                                            £ 650 per month.


If you would like to know more about expenses to claim when running a business from home, Kindly Click or contact us for a free consultation.