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sole trader lives in rented property

Has home office - rent deductible?

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Sole trader works from home - has a room/office used solely for work. Pays £490 per month rental for property - 3 bed.  Can the rent be pro-rated so claim proprtion as business expense e.g. 1/7th relates to rent of office so claim £70/month as business expense? 

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By Wanderer
18th Jun 2019 11:40

https://www.gov.uk/expenses-if-youre-self-employed

HMRC wrote:
If you work from home
You may be able to claim a proportion of your costs for things like:

heating
electricity
Council Tax
mortgage interest or rent
internet and telephone use
You’ll need to find a reasonable method of dividing your costs, for example by the number of rooms you use for business or the amount of time you spend working from home.

Example
You have 4 rooms in your home, one of which you use only as an office.

Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).

If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).

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By CJaneH
18th Jun 2019 12:19

Just a thought. We so often see dividing electricity and gas by the number of rooms. If you consider hot water for washing & bathing, power for cooking, washing machine etc this is plainly wrong. Extra heating and lighting for working hours is all you should claim for.

Perhaps the people pushing smart meters are correct in thinking that people have no idea which of our appliances are the ones that use energy.

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Replying to CJaneH:
By penelope pitstop
18th Jun 2019 12:34

Say I have 12 rooms in my house. In winter the house is freezing. I cannot work as an accountant in freezing temperatures.

So I ramp up the thermostat and heat up the whole house. But I only really want my office warm, which is impossible to do on its own.

So to claim 1/12th is in reality too low. The business use of heat is in fact greater than the 1/12 I claim. But how on earth do I arrive at a sensible figure. Arguably, when I heat up the whole house just for office use it must be approaching 12/12ths of the gas usage.

And the boiler doesn't half burn some gas to heat up empty space. You can actually see the meter dial move when the gas boiler is in its "ON" stage.

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Replying to CJaneH:
RLI
By lionofludesch
18th Jun 2019 13:19

What can you do but guess ?

The amounts are trivial - they're unlikely to be challenged and, even if they are, they're unlikely to be worth pursuing.

I had a client who went into minute detail to work out his utilities, coming up with £355. I pointed out that he cold have claimed £300 under simplified expenses. "Well, £55 is better in my pocket than theirs," he said.

He seemed gutted when I said, "no, tax on £55 - or £11".

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