Instead of working out your actual business costs, it can be easier and quicker to use some pre-defined expenses. HMRC has introduced these to avoid any confusion around calculations of household charges, and are based on flat rates which can be claimed. When you consider your home office, this is classed as your ‘Working from home’ allowance. HMRC have the below simplified expenses options for using your home as an office, and can only be used if you work from home for more than 25 hours per month.
The allowances per month are:
- 20 to 50 hours: £10
- 51 to 100 hours: £18
- 101 or more hours: £26
You can then multiply these accordingly against the number of months they apply for.
You do not need to keep any household bills to claim for your working from home allowance, as this is a flat rate calculation.
Note: The flat rates do not include telephone or internet charges – instead you should calculate the business proportion of these bills by working out how much business usage takes place.