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Can I claim for use of my home if I work from home?

There are two ways to claim a use of home allowance when you work from home.

Low hassle, tax free payment

HMRC will not charge you tax if you claim £208 per year as a use of home allowance.  This allowance would cover household expenses for working from home.

More hassle, but better allowance

You can personally charge rent to the company for the office space it uses.  A general rule of thumb calculation would be a good guide:

  1. Take the mortgage interest, rent and all other household expenses (heat and light, rates, water) and work out your annual cost.
  2. Count the number of rooms you have in the house (excluding your kitchen and bathroom).
  3. Take the number of rooms you use for the business - you may use just one room as an office.
  4. Take the number of rooms you use as an office against the total number of rooms as a percentage.
  5. Use this percentage on the total cost of the house hold expenditure.
So an example would be:
  1. You currently pay £10,500 for mortgage interest, electricity, heat and light.
  2. You have 6 rooms in your house.
  3. You use 1 room for your office.
  4. Take £10,500 * 1/6 = £1,750 that you can claim for rental.
What you need to do
As this is a rent charge you need to declare this payment on your self assessment tax return in the land & property pages.  However, to offset against the declared income you can claim costs against this rent e.g. mortgage interest, rent, heat & light or insurances.  Therefore, the aim would be to reduce the rent charged to NIL by claiming for the expenses you have incurred.

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