To save the work involved in calculating the proportion of household expenses that are deductible in respect of a home office, it may be possible to agree a fixed deduction with HMRC in line with the tax-free allowances for employees who work from home (£4 per week for 2012/13).
It is understood that HMRC do not challenge reasonable claims where there is minor use of home for work.
Nicola is self-employed as a mobile hairdresser. She carries out the associated administration at home.
To make life easier she claims a deduction for the home office costs in accordance with HMRC’s allowance for employees who work from home of £4 per week. She therefore deducts £208 in computing her business profits in respect of the business use of her home.