I have spoken to a few people lately and they are unaware of the 2 ways of clai
ming expenses if they run work from home.
The Flat Rate Method
This method is simply worked out by working out how many hours a m
onth you spend running your Business at home, and is a fixed amount but can vary month to month
25 - 50 Hours = £10 per month
51 - 100 Hours = £18 per month
101 Hours or more = £26 per month
Using this method is quicker than working out actual costs . although could be lower amount, so you would save time but pay more tax
The Cost Method
With the Cost Method you need to work out a percentage which is reasonable between the private element of the cost working from home, which is reasonable. For example if you are a Decorator you may do a bit of admin but most work will be done at clients premises, but if you are a Web Designer you will do most of your work at home
You can work out how many rooms you have in your home and identify the rooms used for your Business and how much time you spend in these rooms
So if there are 10 rooms in your home and you use one 90% of the time for business use, you can add up all the costs that are claimable and divide by 10 and then calculate 90% of the figure to work out the amount you can use for home costs.
Costs you can claim:
interest only on the mortgage
Light & Heat
Telephone & Internet
Repairs, if they relate to the area which is used for Business
I hope this explains the difference between the two types of Home costs which can be claimed, if you have any questions please drop us a message and we will do our best to answer them
Best Wishes '