The Home Office Allowance is a flat rate that you can claim if you’re self-employed and use your home for work. This is done through a system known as simplified expenses, and the amount of Home Office Allowance you can claim depends on how many hours you work from your home each month. This method is a simpler way of claiming home expenses back, as opposed to manually working out all your business costs.
The amount of Home Office Allowance you can claim all depends on how often you work from home. The good news is that you don’t have to work out how much of your home is used for work. However, this can become more complicated if you’re claiming your home as an expense. HMRC needs to deem your claim as ‘reasonable’, or you may be subject to a fine.
See below this simple outline detailing the rate you can claim based on your usage:
|Hours of business use per month
|Flat rate that you can claim
|25 – 50 hours
|£10 per month
|51 – 100 hours
|£18 per month
|More than 101 hours
|£26 per month
The flat rate does not account for telephone or internet expenses – these can be claimed based on the proportion of usage accounted for by business use by working out the costs. What HMRC actually cares about is that your ‘business use’ at home is reasonable. In most cases that means that it should be in line with what you earn from self-employment.
In the UK, you must keep all of your Tax Records (including expense receipts) for a minimum of 6 years. We recommend storing these digitally where possible to prevent them being lost! Even a scanned copy of a receipt can be a great way to keep things in order.
This all depends on your business and your own needs and preferences. We have experts in Sage, Xero, QuickBooks, Free Agent and more. Speak to our accountants today to discuss your options and we can find the best solutions for you!