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Sole Traders - Claiming for use of home
Sole Traders - Claiming for use of home

If you are a sole trader working from home, this article covers the expenses that you can claim.

Steven Moore avatar
Written by Steven Moore
Updated over a week ago

Working from home is now more commonplace than ever! As a result, people spend significantly more time at home, which in turn means they are likely to see an increase in household bills.

HMRC allow you to claim tax relief for some of the additional costs incurred by working from home and in this article we will examine what can be claimed as a sole trader.

What can be claimed?

Sole traders are able to claim tax relief on a portion of household bills that have been used due to working from home. These can include:

  • Electricity bill

  • Gas bill

  • Council tax

  • Metered water bill (only where this is for business use such as if you run a catering service)

  • Home insurance, unless your business has separate insurance

  • Mortgage interest, but you cannot claim any part of the repayments towards capital

  • Rent

  • Household repairs and maintenance where it affects your business use (you cannot claim for things such as a new bathroom suite, but you may be able to claim repainting your office room which you use to meet with clients)

  • Business calls on a landline

  • Broadband

How to claim

To claim, you will need to do this through your annual self-assessment tax return.

Calculating your claims

When it comes to calculating how much you can claim, there are two options. The first way you can claim is the most straightforward which a lot of people opt for out of simplicity. This is by claiming a flat rate depending on the number of hours you work from home per month. The flat rate allowances set out by HMRC are as follows:

  • 25 – 50 hours: £10 per month

  • 51 – 100 hours: £18 per month

  • 101+ hours: £26 per month

This will allow a saving of up to £312 per year.

Alternatively, you can choose to claim a more precise proportion of household bills if this would enable you to receive a larger tax saving. To do this you must provide a reasonable apportionment of the use of your house for business vs personal use.

As a general rule for calculations we would suggest that you consider two variables:

  1. How much of your time do you work at home?

  2. How much of your home do you use for business?

HMRC will consider the type of work you do so it's important to be realistic in your calculations when it comes to allotting how much of your time is spent working from home. A gardener, for example, is likely to spend much less time working from home than a video editor.

Another factor to consider is how much of your home is being used for work purposes. For example, it will be far more likely that you spend a lot of time in your study or office space versus your kitchen or bathroom.

Once you have considered these two factors, you can take the costs of your eligible household bills and divide by the number of rooms in the house. Then determine which rooms you actually use for work and allocate a percentage of time that the rooms are occupied for work.

If you require any further assistance, please don't hesitate to reach out to our dedicated support team via Intercom in the bottom right corner of Ember.

Remember HMRC have an expense checker here that you can use to calculate whether you should claim the £312 or look to claim more.

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