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Knowledge Base

Using your home as an office

02 February, 2009

Use of Home as an Office

If you have an office in your home you can claim a modest amount that can be justified to HMRC.

For minor use, e.g. just filling in expense claims or raising monthly invoices, because you leave home each day to carry out your contract activities at a client site, the HMRC guideline example is a figure of £2.00 per week as acceptable.

If the claim is greater than £2 per week then this could trigger an investigation by HMRC so unless your costs are significant it is probably sensible not to make any claim.

If your costs are significant, you must actually work from home on revenue generating activities. The office you use must be a business office and not just a bedroom or a kitchen table. It must be available to be inspected by HMRC who may ask to hold a meeting in the office. The cost should represent the cost of you providing an office at home i.e. a proportion of heating, lighting etc plus a proportion of council tax and other direct property costs. For example: In a 7 room house you could charge 1/7 of your costs.

However, if this is a large sum you could find that your office is excluded from your principal private dwelling allowance. This would mean when you come to sell your house, that proportion, in this case 1/7, of the property is subject to Capital Gains Tax.

If you leave your home to carry out your contract activities at a client site, then it is unlikely you can make a claim and in many cases, it is probably sensible not to make any claim.

For a compregensive article on claimable business expenses see: Limited Company Business Expenses.

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