Updated: Aug 27, 2020
It has been tough time for many self employed people. Most self employed people have to make sum adjustment in their working lifestyle to cope with Covid-19. This includes working from home.
Question: I used my home as office can I claim some expenses ?
It all depend on the work you do for example you may be able to claim for chairs, table and computers etc. If you have set up a limited company you can make a rent arrangement to show your business is renting part of the house.
HMRC rules are complex, It always good to take your accountant advice when claiming any home use as office expenses. However I will try to provide some basis information which will allow you to understand what you can claim ?
Limited(LTD) company can claim £6 per week allowance for 2020/21 tax year.
If you use majority of your house as office you will be able to claim more expenses by creating rental agreement.
Other thing to consider, the rent you receive will be calculated as income you have to report it in your self assessment after deducting any expenses, It will be less tax efficient on your personal tax return
You also need to remember do not link one room as your office in the house as it will trigger capital Gain tax on sale of house as it will not qualify for Private Residence Tax relief.
As a self employed you can use 'check Simplified expenses checker, https://www.gov.uk/simplified-expenses-checker or flat rate expenses
Simplified expenses for the self-employed mean you claim a flat rate for your allowable expenses based on the number of hours you work from home each month. You’ll need to work a minimum of 25 hours a month from home to qualify. You can claim up to £26 per week if you work more than 100 hours per month from home.
Due to Covid-19 most employee also worked from home, you can also claim £6 per week from your employer or Direct from HMRC https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87
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