Use of home as office

Claiming for working from home. Two methods, and one is much simpler.

What it means

Self-employed people can claim a proportion of household costs, or use HMRC's simplified flat rate based on hours worked. Directors can claim a small weekly amount or a proportion under a licence agreement.

Why it matters

It is a legitimate deduction that is frequently under-claimed by the self-employed and incorrectly claimed by directors.

What it looks like in practice

For a company, the director is an employee, so the position is different: a small tax-free allowance, or a formal rental agreement between director and company, which brings its own income tax consequences.

What to watch out for

Claiming a proportion of mortgage capital, which is not allowable. And using a room exclusively for business, which can affect capital gains relief on the home.

Where to get proper advice

GOV.UK for the current rates and thresholds, which move most years. Your accountant before acting — this is exactly the kind of question a fee is for.