Working From Home Business Expenses: What Can You Claim?

The amount of people working from home has risen significantly during the past decade. From saving the cost of fuel to cutting the price of business quarters, there are many benefits of working from your own living space. A lot of people find they have a better work-life balance and working parents also find working from home a lot more cost-effective. There has also been a significant rise in people working from home since the start of the pandemic. Many people have not returned to the workplace and will continue to work from home on an ongoing basis. Also there is a significant amount of people now freelancing from their own property. When you work from home, you are entitled to business expenses. Here is a guide to what you can claim back in expenses when you work from home.

What can I claim?

From gas to water, there are many bills that you can claim as expenses when you are working from home. These help to bring down your overall tax bill and should be calculated before working out your annual tax. Here are some of the expenses that you can claim:

Rent and mortgages

A lot of people don’t realise they can claim a proportional amount of rent if they work from home. But if you work from home, this is something you can claim. If you are renting from a landlord, you should work out this cost as part of your expenses. Work out exactly how much you pay on a yearly basis and then you can add a proportion of this to your expenses if you are working from home. The same applies when you are working from home and own a property that you pay a mortgage on. You can calculate some of the mortgage interest when it’s time to work out your tax. It can’t be the repayment but does apply to the interest you have to pay for the property. This is a significant amount that will help bring down the final cost of your tax.

Council tax

Another significant household bill that you can claim when working from home is council tax. After all, this is a bill you pay for the house where you conduct your work. Households across the UK pay a significant amount every year for their council tax bill. But if you work from home, you can work out a proportion of this significant annual amount into your expenses. Just ensure that if you are using your property solely for your business, you need to pay business rates.

Electric and gas

You can also claim electricity and gas for your property when it comes to your expenses. When you need to light up your home and power up the items you use for work purposes, you will be using electricity. Therefore, this is something you can also claim a proportion for when it comes to working out your expenses for working from home. The same applies when heating the home for you to work in. If the rooms you work in require heat, this is also something you can also claim for. Whether you heat your home with gas, electricity or oil, you can work out this cost when it comes to expenses.

Internet

Another major bill that you can claim for when working from home is your broadband. After all, a lot of people require the internet to be able to do their work in the modern age. A lot of people also have to pay out for the quickest internet speed when working from their property which is of significant cost. Therefore, you can claim a proportion of the internet bill for your home when it comes to expenses. If you use a phone line too from your property for work purposes, this is also a bill that you can include when working out your expenses. A lot of people have to pay for the line whether they use it or not for phone calls as it needs to be active to run their internet, so this is a bill you can account for too.

Water

You can also claim the utility bill of water if you work from home. From making drinks to going to the bathroom, if you are doing this while working, this bill is something you can also claim for when working out your annual expenses.

Office equipment

Anything you buy to help you work from home such as printer ink, stationery or even software for your computer, you can also claim this when it comes to your expenses. If you need a new laptop or tablet for work purposes, these should also be added if they enable you to work from home.

How do I claim?

The first thing you need to know is how you can claim for the expenses. When you are working out your expenses, you will likely use one of two methods; the flat rate or the costs method. For the flat rate method, there is a set amount you can use for your accounts as expenses. You basically work out how many hours per month you have been working at home and then add this fixed amount as expenses. For instance, if you have been working between 50-100 hours, you can add £18 for a month. Doing this flat rate method is a less time-consuming way to work out your light, heat and power usage, but you will have to add other working from home expenses yourself.

The other method is the costs method. With this method, you count the rooms in your home you use for work and the expenses you can claim, then divide this amount by the rooms to get a figure you can use for expenses. For instance, if you have 6 rooms you use in the home to conduct work, you can divide this by the total amount to calculate a fair figure. A lot of people find this a fairer and a significant amount they can claim. If there is anything else you’re unsure of, feel free to reach out to Braant and we’ll be happy to help.