[email protected]
  • Buxton 0129 822 108
  • Chesterfield 01246 277 266
  • Rotherham 01709 377 909
  • Sheffield 01142 664 432
  • Knaresborough 01423 787 616
  • Wakefield 01924 376045
  • Our Services
    • Chartered Accountants
    • Financial Services
    • Wills & Probate
    • Residential Mortgages
    • Commercial Finance
    • Corporate Finance
    • Contractors
    • Capital Allowances
  • Our Offices
    • SMH Andertons Liversidge – Rotherham
    • SMH Bullock Woodburn – Buxton
    • SMH Haywood & Co – Rotherham
    • SMH Head Office – Sheffield
    • SMH Jolliffe Cork – Wakefield
  • About SMH
    • Key People
    • Testimonials
    • Careers
  • Contact
  • Blog
  • Client Area
  • Our Services
    • Chartered Accountants
    • Financial Services
    • Wills & Probate
    • Residential Mortgages
    • Commercial Finance
    • Corporate Finance
    • Contractors
    • Capital Allowances
  • Our Offices
    • SMH Andertons Liversidge – Rotherham
    • SMH Bullock Woodburn – Buxton
    • SMH Haywood & Co – Rotherham
    • SMH Head Office – Sheffield
    • SMH Jolliffe Cork – Wakefield
  • About SMH
    • Key People
    • Testimonials
    • Careers
  • Contact
  • Blog
  • Client Area
Feb 22

Running a home office – can you claim on expenses?

  • February 22, 2018
  • SMH Chartered Accountants, SMH Chartered Tax Advisers, SMH Financial Services, SMH Payroll & Pensions

As more and more people choose to work from home, the question of how you can reclaim any home office expenses is frequently asked.

The general HMRC rule for claiming tax relief on business expenses is that you can only reclaim costs that have been ‘wholly and exclusively’ incurred in connection with your trade. If your personal and business expenses are ‘mixed’, you can only deduct the business element if it can be separately identified. Typically, HMRC will allow some ‘home office’ claims as long as they have been calculated on a reasonable basis, and that such claims are not excessive.

You should therefore take great care when working out your home office expenses, preferably with the help of an accountant.

Some accountants suggest calculating the proportion of your home used for business purposes (either as a fraction of the total number of rooms, or by floor space), and claiming back that proportion of your general household expenses (e.g. electricity, gas).

Others suggest only claiming a fixed £3 per week expense to avoid attracting the attention of the tax authorities, unless you have a significant claim to make.

Potential Pitfalls

  • If you make it clear that part of your home is dedicated for business use, this may attract the attention of the local authority Valuation Office, who may be keen to apply business rates. If that space is for “mixed use”, i.e. personal as well as business use, then business rates should not be applied.
  • If you sell your house, having claimed that a proportion of it has been used for business purposes, there have often been warnings in the past that this may have Capital Gains Tax implications for the sale. However HMRC clarified that this is not the case, and mortgage interest can be offset against your tax bill where relevant.
  • Insurance and Mortgage companies will often ask you declare that your home is used solely for residential purposes (same goes for tenancy agreements), but if you are running a small home office, and take out business insurance for your business-related items, you should be OK.
  • To avoid triggering an HMRC investigation when you make your claim on your self-assessment form, you must be sure that your claim is genuine and necessary.
  • You should only claim if the amounts involved are significant and if you genuinely do use a proportion of your home solely for running your business. You should be prepared to provide full calculations for any expenses claimed.

If you need any tax advice or assistance relating to the above Sutton McGrath Hartley is a multi-disciplinary firm of chartered accountants, financial advisers and lawyers offering comprehensive financial expertise for all business, personal and family interests.

To discuss your requirements, please contact our office on 01142664432 or email [email protected]

  • Facebook
  • Twitter
  • LinkedIn
  • E-Mail

Related Posts

  • Covid-19 measures: 26 March 2020March 26, 2020
  • New website as part of group wide re-brand for Sutton McGrath HartleyDecember 12, 2018
  • Draft Finance Bill 2019July 24, 2018
  • Expenses if you are Self-EmployedMay 16, 2018

Comments are closed.

Categories

  • Careers
  • SMH Capital Allowances
  • SMH Chartered Accountants
  • SMH Chartered Tax Advisers
  • SMH Commercial Finance
  • SMH Contractors
  • SMH Conveyancing
  • SMH Corporate Finance
  • SMH Financial Services
  • SMH Jolliffe Cork
  • SMH Payroll & Pensions
  • SMH Residential Mortgages
  • SMH Wills & Probate
  • Uncategorized
  • VAT
ACCA
ICAEW Chartered Accountants
Chartered institute of taxation
SMH Chartered institute

Our Services

  • Chartered Accountants
  • Financial Services
  • Wills & Probate
  • Capital Allowances
  • Commercial Finance
  • Residential Mortgages
  • Corporate Finance
  • Contractors

[email protected]

Careers

Social

  • Facebook
  • Linkedin
  • Twitter
  • Instagram
SFSY EU

Sheffield

5 Westbrook Court, Sharrow Vale Road,
Sheffield, S11 8YZ

0114 266 4432

Chesterfield

82 Saltergate,
Chesterfield, S40 1LG

01246 277 266

SMH Haywood & Co

Knaresborough Technology Park,
Manse Lane, Knaresborough, HG5 8LF

01423 787 616

SMH Jolliffe Cork

33 George Street
Wakefield, WF1 1LX

01924 376045

SMH Haywood & Co

24-26 Mansfield Road,
Rotherham, S60 2DT

01709 377909

SMH Bullock Woodburn

Norfolk House, Hardwick Square North,
Buxton, Derbyshire, SK17 6PU

01298 22108

SMH Andertons Liversidge & Co

12-14 Percy St, Rotherham S65 1ED

01709 512600

Official Information | Legals | Privacy Policy