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Working from Home and which expenses to claim?

Working from Home and which expenses to claim? 

Being self-employed isn’t that easy, right? Well, reading this guide will make one thing easier for you. That is, working from home expense claim.


Simplified Expenses  

HMRC allows simplified expenses calculation for self-employed. Following table is a threshold of working hours per month and flat rate of expenses that can be claimed as business expenses.

Hours per  month    

Flat rate expenses per month       

         25 to 40


         51 to 100


       101 or more


Based on the above threshold, the maximum that can be claimed for sold traders working over 100 hours per month is £26 per month. If you only occasionally use your home for working and total number of hours amount to less than £25 per month, you will be able to claim £10 per month.


Proportional Costs

Under the proportional costs method, you can claim an appropriate % of running cost of your home if you work from home. Let’s say you have 3 rooms in your house and only 1 room is being used for work purposes. Based on 25% of business use of this room and total running costs of £12000 per year, total proportional costs that can be claimed will be as below:

Total running costs/ Total £12000/3 = £4000 (running cost for each room)

Running costs of each room x % of usage = £4000 x 25% = £1000

So with proportional costing method, you can claim £1000 towards working from home expenses.


Which Method?

It would completely depend upon your business circumstances and no. of hours worked from home. In particular, you should seek professional advice to ensure which kind of expenses to include in running costs of your house. For example, expenses such as capital repayment of mortgage is disallowed for these purposes.


UGS Accountants is a specialist accountant firm for contractors and small businesses. Our packages start from £100 per month and include free Xero subscription for online accounting. 

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