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Use of home allowance for the self-employed

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The home has a dual role for many people who carry on a trade. It is where they live and also where they carry on some or all of their trade. Many of the costs for household expenses cover both trade and private use.

Methods of calculating use of home:

  1. Simplified flat rate based on the number of hours you work from home
Hours of business use per month Flat rate per month
25 to 50 £10
51 to 100 £18
101 and more £26
  1. Proportion basis

You may be able to claim a proportion of your costs for things like:

  • heating
  • electricity
  • Council Tax
  • mortgage interest or rent
  • internet and telephone use

You’ll need to find a reasonable method of dividing your costs, e.g. by the number of rooms you use for business or the amount of time you spend working from home.

Example:

You have 4 rooms in your home, one of which you use only as an office.

Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).

If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).

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