Posted by: I am often asked by freelancers about how they can easily calculate a total amount to claim for the self-employed business they run from home, to name but a few ,the total amount of usage for rent, gas, insurance, council tax, internet usage and broadband as an example.
There is an easy flat rate calculation of how much tax relief you can claim of the expenses of running your home. You simply record how many hours you work at home each month and claim the appropriate flat rate as below:
– Working 25 to 50 hours at home allows a £10 claim for the month
– Working 51 to 100 hours at home allows a £18 claim for the month
– Working 101 or more hours at home allows a £26 claim for the month
This rate covers the cost of power, telephone, internet access, but it doesn’t cover council tax, insurance, rent or mortgage interest. Those other costs should be apportioned according to the space you use for your business in the property, and how many hours you use that space.
You can chose to apportion all your expenses however my preference would be the flat rate as there are no grey areas. The HMRC provides some good examples here http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm.
If you have decided to prepare your own self assessment don’t be afraid of telephoning the HMRC Self Assessment Helpline. In my experience they are usually really helpful. I do have a caveat though, if you are unsure then go see an accountant.