New use of home - simplified method

New use of home - simplified method

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For basic clients we used to claim the £4 per week allowance for use of home.

Or if they spent more time from a home office we'd calculate a proportion of costs based on number of rooms, hours worked etc.

Now HMRC have brought in the simplified method has this completely replaced the £4pw?

It seems to be less for those working less than 25 hours per month from home. Especially as it's meant to include phone, internet etc too

Also can we still decide to do the long method if there is a benefit?

Replies (4)

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By Steve Kesby
16th Apr 2014 15:58

£4 per week...

Has never applied to the self-employed, albeit HMRC may previously have accepted it.

The "de minimis" per their published guidance for the self-employed remains £2 per week, from the examples in BIM47825.

So, less than 25 hours per month, use £2 per week = £104, but let's round that up to £10 per month.

25+ but less than 51 hours per month, use £10 per month (a bit more than £2 per week).

51+ but less than 101 hours per month, use £18 per month (around £4 per week).

101+ hours per month, use £26 per month (£7 per week).

Alternatively use actuals.

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By taxhound
16th Apr 2014 17:25

@ Steve

I believe under the new "simpler" flat rate system, if you work less than 25 hours per month at home there is NO deduction.  If you work 25 - 50 hours, then you can claim a whopping £10 per month.

See section 3

https://www.gov.uk/simpler-income-tax-simplified-expenses/business-use-o...

Not sure how this sits with BIM47825 where they say they would not enquire into a return where someone had claimed £2 per week for writing up records at home (and clearly spending much less than 25 hours per week doing so)  but they do seem to contradict each other.  I appreciate that the flat rate expenses are not mandatory but I can see trouble ahead....  If there is no science behind your £2 per week claim will HMRC continue to allow it?

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By Steve Kesby
16th Apr 2014 17:36

@ taxhound

I think if you work at home less than 25 hours a week yousimply  wouldn't claim simplified expenses and would use actual; whereupon there is a £2 de minimis (from examples 1 and 3 in BIM47825) if you spend an hour or so a week writing up your books (or similar) at home.

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By taxhound
16th Apr 2014 17:48

Agreed

So why not just have £2 as a minimum for simplified expenses?  HMRC typically over-complicating a simplification.

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