\n<\/p>\n
The most recent\u00a0<\/span>prediction<\/span><\/a>\u00a0is that it could take at least six months before the UK regains a st<\/span>a<\/span>t<\/span>e<\/span>\u00a0of normality, meaning that working from home will most likely be in your foreseeable future.<\/span>\u00a0<\/span><\/p>\n There are some positive<\/span>s<\/span>, working from<\/span>\u00a0home<\/span>\u00a0doesn\u2019t only enable business continuity but also allows you to keep overheads down.\u00a0<\/span>\u00a0<\/span><\/p>\n Additionally, you\u2019re able to claim tax relief for home expenses if you run your business from home.<\/span>\u00a0<\/span><\/p>\n All you need to do is use a \u2018reasonable\u2019 method to calculate your expenses, which we\u2019ll cover in this blog<\/span>:<\/span>\u00a0<\/span><\/p>\n Calculating\u00a0<\/span><\/b>y<\/span><\/b>our working from home expenses\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n Calculating the expenses for your home\u00a0<\/span>usage<\/span>\u00a0can be broken down into four simple steps:<\/span>\u00a0<\/span><\/p>\n Step\u00a0<\/span><\/b>1<\/span><\/b>\u00a0<\/span><\/p>\n Firstly, determine how many rooms you have.<\/span>\u00a0<\/span><\/p>\n HMRC\u00a0<\/span>defines<\/span>\u00a0any \u2018normal living space\u2019 as a room, excluding bathrooms and hallways, so\u00a0<\/span>your<\/span>\u00a0bedrooms, kitchen, living room and dining room would\u00a0<\/span>all\u00a0<\/span>count.<\/span>\u00a0<\/span><\/p>\n It\u2019s important to state that i<\/span>f<\/span>\u00a0you have a room dedicated to business use, you\u2019ll have to pay Capital Gain Tax on that room when you sell your home.\u00a0<\/span>T<\/span>op tip, if you have a dedicated\u00a0<\/span>business<\/span>\u00a0room<\/span>,<\/span>\u00a0try using it for something additional like a workshop or game room.<\/span>\u00a0<\/span><\/p>\n Step\u00a0<\/span><\/b>2<\/span><\/b>\u00a0<\/span><\/p>\n The second step is to calculate the percentage of use for each of your previously determined rooms.<\/span>\u00a0<\/span><\/p>\n For example<\/span>, if you spend 8 hours a day working in your office and 2<\/span>\u00a0<\/span>hours\u00a0<\/span>playing games in there, your percentage of use is 80%.<\/span>\u00a0<\/span><\/p>\n This needs to be done for each room you work<\/span>\u00a0in.<\/span>\u00a0<\/span><\/p>\n Step 3<\/span><\/b>\u00a0<\/span><\/p>\n Now you need to\u00a0<\/span>divide<\/span>\u00a0each bill<\/span>\u00a0by the total\u00a0<\/span>number of rooms.<\/span>\u00a0<\/span><\/p>\n Typical bills\u00a0<\/span>include<\/span>\u00a0<\/span>rent, council tax, heating,\u00a0<\/span>electricity<\/span>,\u00a0<\/span>home\u00a0<\/span>insurance<\/span>\u00a0(if it covers your business)<\/span>\u00a0and the interest on mortgage payments (but not the capital).<\/span>\u00a0<\/span><\/p>\n Also, s<\/span>ervices such as broadband and phone lines\u00a0<\/span>need to be calculated base<\/span>d<\/span>\u00a0on the percentage of\u00a0<\/span>business use<\/span>.<\/span>\u00a0<\/span><\/p>\n Usually<\/span>,<\/span>\u00a0<\/span>you<\/span>\u00a0can only claim the cost of calls<\/span>\/use and not the line rental cost,\u00a0<\/span>unless<\/span>\u00a0you\u2019re able to\u00a0<\/span>prove<\/span>\u00a0you\u2019ve only installed the internet<\/span>\/phone line to work from home.<\/span>\u00a0<\/span><\/p>\n As an example,<\/span>\u00a0<\/span>your applicable bills total \u00a3500 per month and you have\u00a0<\/span>5 \u2018normal living spaces\u2019<\/span>, it works out at \u00a3100 per room.\u00a0<\/span>\u00a0<\/span><\/p>\n Step 4<\/span><\/b>\u00a0<\/span><\/p>\n Now you have<\/span>\u00a0your room cost and work use calculated<\/span>,<\/span>\u00a0you\u2019re able to bring these numbers together for a calculation.<\/span>\u00a0<\/span><\/p>\n Using the\u00a0<\/span>example<\/span>\u00a0in this blog,\u00a0<\/span>the\u00a0<\/span>spend<\/span>\u00a0in the office would be<\/span>\u00a0\u00a380 (\u00a3100 x 80%)<\/span>.<\/span>\u00a0<\/span><\/p>\n This figure\u00a0<\/span>shows<\/span>\u00a0your business usage cost and the\u00a0<\/span>amount you\u2019re able to\u00a0<\/span>claim<\/span>\u00a0in working from home expenses.<\/span>\u00a0<\/span><\/p>\n Flat rate calculation\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n If you don\u2019t fancy<\/span>\u00a0this calculation each month,\u00a0<\/span>HMRC<\/span><\/a>\u00a0offers a simpler process to\u00a0<\/span>calculate<\/span>\u00a0your working from home expenses.<\/span>\u00a0<\/span><\/p>\n They<\/span>\u00a0offer a\u00a0<\/span>flat<\/span>\u00a0rate calculation\u00a0<\/span>using a fixe<\/span>d<\/span>\u00a0amount which\u00a0<\/span>varies on the\u00a0<\/span>number<\/span>\u00a0of hours you work from home each month.<\/span>\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n This\u00a0<\/span>flat rate calculation can only be applied to heating<\/span>\u00a0and electricity, it\u2019s also worth b<\/span>e<\/span>aring in\u00a0<\/span>mind<\/span>\u00a0that this\u00a0<\/span>flat\u00a0<\/span>rate may be less\u00a0<\/span>than<\/span>\u00a0what\u00a0<\/span>you pay, meaning you end up paying more tax.<\/span>\u00a0<\/span><\/p>\n Additional resources\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n Hopefully<\/span>, the blog has been useful and will enable you to claim\u00a0<\/span>additional<\/span>\u00a0<\/span>t<\/span>a<\/span>x relief\u00a0<\/span>if you have to run your business f<\/span>r<\/span>om home for the foreseeable future.<\/span>\u00a0<\/span><\/p>\n For more information on how you can\u00a0<\/span>maintain<\/span>\u00a0business operations during these uncertain times, check out our\u00a0<\/span>support hub<\/span><\/a>\u00a0and to request a\u00a0<\/span>free tr<\/span>i<\/span>al of\u00a0<\/span>\n\n
\n Average number of hours spent working from home per month<\/span><\/b>\u00a0<\/span><\/td>\n Amount of tax relief you can claim per month<\/span><\/b>\u00a0<\/span><\/td>\n<\/tr>\n \n 25 \u2013 50<\/span>\u00a0<\/span><\/td>\n \u00a310<\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n 51 \u2013 100<\/span>\u00a0<\/span><\/td>\n \u00a318<\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n 101 +<\/span>\u00a0<\/span><\/td>\n \u00a326<\/span>\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n