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. For example, a self-employed person who uses electricity both privately and for the trade will normally get one electricity bill. The part of the cost attributable to trade use is allowable.

What is allowable depends on the particular facts, including the extent and nature of trade activities undertaken in the home. Different traders organise their businesses in different ways. There is no fixed proportion of costs allowable in a particular type of business, although the same type of trade conducted in the same way may be expected to result in similar deductible amounts.

The factors to be taken into account when apportioning an expenses include:

• Area: what proportion in terms of area of the home is used for trade purposes?
• Usage: how much is consumed? This is appropriate where there is a metered or measurable supply such as electricity, gas or water.
• Time: how long is it used for trade purposes, as compared to any other use?

Therefore your client will be able to make a claim for 10% of the cost of light and heat incurred during the hours of 8am to 12am. A tenth of the costs are £150 and half of these costs by time (4/8) relate to business use. A claim can be made for £75.