How much can you claim for using your home as an office?

If you’re working from home or planning to do so in the future, you might be wondering how much you’re able to claim from your Limited Company for completing remote work from your own home.

In this blog we explore how much you’re able to claim.

How much can you claim?

In the past a fixed rate of £10 was able to be claimed through a Limited Company for working from home, and whilst this amount was never confirmed by HMRC, it was also never disputed as an unacceptable amount.

Then in 2012 HMRC introduced the fixed rate of £6 per week, which is a flat rate expense that’s a fair approximation of the costs associated with using your own home as an office, and requires no further receipts or justification.

Whilst there hasn’t been an increase in the amount of HMRC enquiries into the use of home offices, it’s worth remembering that any claims that exceed £6 per week will need a justification.

There are two options:

1. Claim £6 per week for the use of your home as an office expense as published by HMRC. As previously mentioned, this is the easiest method, as it requires no justification
2. Provide your justification for a higher claim. You’ll need to add up the costs associated with running your own home, and apportion a claim for the amount of space and time used by your own company

How to justify a higher claim

The below formula is a good basis for calculating an apportioned charge for a use of home as an office claim:

B + (D% x C) x E = F divided by A

Where:

A = The total number of rooms in the home excluding bathrooms and hallways

B = The number of rooms dedicated solely for business use

C = The number of rooms used partly for business and partly for personal use

D = The percentage of time spent for business use in comparison to personal use

E = The total home expenditure including water and sewerage, rent, mortgage interest, heat and light, buildings insurance.

What else do I need to consider?

A business using a substantial part of their property for business use may have implications on Capital Gains Tax, business rates and principle private residence relief. Ensure to speak with your personal SG Accountant for more information on how this may affect you.