WFH and expenses

[BillyPilgrim]

Obviously, as with most of the country, I've been WFH. I'm normally an onsite contractor so don't claim any rent for my limited company. Even after lockdown, it's likely that I will not be required to visit the office as much, so can I claim part of my rent (I rent from a private landlord, don't own the property) as a business expense? I've done a few searches online and seem to get conflicting advice.

[northernladuk]

Just claim the 6 quid a week. It's only temporary so can't claim it as a main office just for awhile and back again. We did this last week in another thread.

Use the Google search method as shown below.

Home Office rent site:contractoruk.com/forums

Play about with the keywords. That's just an example.

Just to note the recent example isn't a very good one. I seem to remember the OP though his kitchen could be claimed as one of the work rooms etc. You'll know what I mean when you find it..

[TheCyclingProgrammer]

£6 a week (no evidence required) or additional costs incurred as a result of working from home, e.g. extra utility costs (evidence and calculations required) only.

Your rent and other fixed costs do not pass the wholly, exclusively and necessarily for business purposes rule and cannot be claimed for, not even proportionally as you would be paying them anyway.

[Laura@SGAccounting]

I would say you can claim a proportion of the rent (or mortgage interest, if applicable) along with the utilities. You then look at what % of the house is used for business and apply that proportion. HMRC usually only need to see a 'reasonable and fair' apportionment of your personal costs that are being included in the business. You will need to keep updating the claim because of changes in household bills so it may be easier just to claim the £6 a week in the short-term.

[TheCyclingProgrammer]

I would say you can claim a proportion of the rent (or mortgage interest, if applicable) along with the utilities. You then look at what % of the house is used for business and apply that proportion. HMRC usually only need to see a 'reasonable and fair' apportionment of your personal costs that are being included in the business. You will need to keep updating the claim because of changes in household bills so it may be easier just to claim the £6 a week in the short-term.

HMRC guidance is pretty clear on this: under Section 316A employees/directors cannot claim a proportion of fixed costs like rent as an employment expense. They can only claim for reasonable *additional* costs (or for simplicity, the fixed weekly amount).

The additional household costs must be reasonable and must be incurred in carrying out theduties. This excludes costs that would be the same whether or not the employee works at home, for example mortgage interest, rent, council tax or water rates.

EIM01474 - Employment Income Manual - HMRC internal manual - GOV.UK

[BillyPilgrim]

Thanks for the replies, I will investigate further. My initial thinking (outside of the £6 a week), was expensing part of the rent, as suggested in this article.

Working from home? Make sure you claim these expenses - FreeAgent

Something along the lines of 20-30% of rent, so it's not too excessive for HMRC to start questioning it (total rent for the year = £10k, so £2-3k for rent expenses). I also saw something about drafting a rental agreement, if my rent lease allows for sub-letting.

EDIT: Just seen the guide that northernladuk posted for bartman - this was interesting link (Contractors’ Questions: How much to claim for my home-based office?). I guess my future WFH is not my choice, as the site office will only request certain people to work onsite, and given the social distancing that is likely to remain even after lockdown, working onsite is unlikely to be available to me. Hmm tough one to ponder.

[northernladuk]

Not really.

[gables]

!! 6 quid a week, is it really worth the effort

[BlueSharp]

!! 6 quid a week, is it really worth the effort

my accountant counts all the weeks and tells me to take it all out as an expense claim at the end of the year. Nice little bonus.

[vwdan]

my accountant counts all the weeks and tells me to take it all out as an expense claim at the end of the year. Nice little bonus.

I just set up a recurring expense in FreeAgent, and a standing order. It's £300 a year, tax free, no matter how you cut it!