Work from home 4 days a week - claim rent as an expense

[steveh1983]

I'm a freelance web developer trading under a limited company, and have recently taken a role that allows me to work from home 4 days a week (I say allows me - the client's office essentially doesn't have the capacity for me to be on site all week). I rent my home - it is possible to claim part of my rent as an expense?

I've researched various advice online, and also spoken to a number of accountants - and all I seem to get is conflicting advice. So I'd be interested to know of anyone in a similar situation and what they do.

[hyperD]

If you work in IT then you'll soon find Google is actually your best friend.

Diminishing and paltry list of expenses you can claim working from home (examples)

More here

More specifically to your rent inquiry:

This is a flat rate charge which the employee has to pay irrespective of whether they work at home or not. No part of it is paid wholly and exclusively in the performance of their employment duties.

Linky

I work from home office mainly so have been through this frustrating process myself...

[northernladuk]

There is an article from CUK talking about using a percentage of your home here but I seem to remember reading in the forums that unless you are fully working from home you should just claim the 3 quid a day or something.

Also if you start claiming your rent you need to check your tenancy agreement to make sure it doesn't forbid your rented property being used for commercial purposes. You doing this at home may invalidate your landlords insurance so would be wise to make sure he knows.

[TraceRacing]

£3 per week, not per day?

[Scrag Meister]

£3 per week, not per day?

Correct, £156 per year.

If its your primary home and you aren't commuting I'm pretty sure this is not possible except for the small amount mentioned.

[northernladuk]

£3 per week, not per day?

My apologies you are quite correct.

[SallyPlanIT]

I'm a freelance web developer trading under a limited company, and have recently taken a role that allows me to work from home 4 days a week (I say allows me - the client's office essentially doesn't have the capacity for me to be on site all week). I rent my home - it is possible to claim part of my rent as an expense?

I've researched various advice online, and also spoken to a number of accountants - and all I seem to get is conflicting advice. So I'd be interested to know of anyone in a similar situation and what they do.

Home working expenses that you wholly, exclusively and necessarily incur in the performance of your duties and which exceed the HMRC allowable £3 per week may be allowable against corporation tax providing you can prove that the home is a workplace because the following conditions have been met:

The duties are substantive duties for the employment.
No suitable client premises are available at the client or the premises are closed.
The duties cannot be performed without the need for suitable home premises.
There has been no preference of choice made by the employee as to where the duties are performed.

Expenses that qualify

Eligible expenses are those that have been incurred above what would normally be charged for general living costs, including:

units of gas
units of electricity
units of water for metered water only
business insurance
business telephone calls
dedicated business internet connection
dial up broadband (dongle)
business rates if applicable.

Expenses that do not qualify

The following expenses are generally a fixed flat rate fee that has to be paid irrespective of whether a business is carried out from home:

council tax
water rates
rent
mortgage interest or capital repayments
landline telephone line rental
household broadband connection rental.
Prior to 2005/06, council tax, mortgage interest and rent were allowable.

[ITguy]

I work from home all the time as my clients are outside UK. After consulting with my Accountant, I do claim gas,electricity, mortgage interest proportionately to time and area used for my work.

FYI,

Specific deductions: use of home: specific expenses

[SallyPlanIT]

I work from home all the time as my clients are outside UK. After consulting with my Accountant, I do claim gas,electricity, mortgage interest proportionately to time and area used for my work.

FYI,

Specific deductions: use of home: specific expenses

I think this was later replaced by this, hard to know sometimes as HMRC guidance is not dated

Other expenses: home: household expenses: expenses that are not deductible

[Greg@CapitalCity]

Thats right. Expenses you CANNOT claim are;
- Rent (unless you are required to rent extra space for home working, in which case the extra rent may be claimed)
- Council tax
- Mortgage interest
- Water rates (unless water is metered and you are REQUIRED to use water for your job)
- Repairs or re-decoration of home office

If it works to your advantage you can set-up a licence for non-exclusive use of a property to claim rent/mortgage interest, council tax etc - this carries further implications of needing to declare income received (as a landlord, effectively) on your personal tax return, and is best dealt with by consulting your accountant.