Working from home

Although it has become more commonplace for employed individuals to work from home since the start of the Covid pandemic in 2020, many of those who are self employed have their base at home.  It has become more commonplace to work from home and ditch paying for that external office, as many of us have found that working from home does work and in many cases can provide that much-needed flexibility, one of the key reasons why you may have chosen to become self employed in the first place.

With the increase in the cost of living and in particular home energy, we have become acutely aware of the impact that working from home can have on the running costs of the home.

What home costs can I claim for in my sole trader business?

There are two options:

 1.     Use the simplified expenses for the self employed, if you work from home for 25 or more hours per week.  This means you do not need to collate all your household bills, you can simply use the HMRC flat rate, which is based on the hours your work from home per week. You can claim:

-       25-50 hours:  £10 per month

-       51-100 hours:  £18 per month

-       101 or more hours per month:  £26 per month

2. Claim for a proportion of actual costs.

This means that you will need to collate your home running costs. These may include mortgage interest (not capital repayments), rent, water, gas, electric, and council tax.  These costs are then apportioned based on the proportion of the home used for the business and again according to the number of hours worked from home over the course of the week.

If you would like to chat this through, please feel free to contact us to arrange an appointment.

You can call us on 01298 211535 or email hello@sphereaccountants.co.uk