Tax Deductions For Home Expenses- Self Employed Working From Home

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.

avatar Name: Alex Eager
About: Alex has worked as a Financial Controller and Finance Director for many years for a variety of companies across a range of industries but more recently she has moved away from accounting working for an internet marketing agency as Finance and Operations director, primarily overseeing the finance functions and search engine optimisation (SEO) for clients. Follow Alex on G+ and on Twitter @Alex_BusDirUK Alex runs her own company with two fellow owners developing a suite of e-commerce web sites and promoting them directly. “I found that SEO and finance were quite compatible both needing an eye for detail, research and analysis as well keeping up with new developments and changes.” Visit Alex's G+ Profile. and Twitter
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