Tax Glossary

Home Office Allowance

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Last updated on:
March 17, 2024

The Home Office Allowance presents a straightforward option for self-employed individuals to claim expenses for using their home as a workspace. This approach falls under the umbrella of simplified expenses, offering a hassle-free alternative to the detailed tracking of all business-related home costs.

Claiming Your Allowance

The amount you're eligible to claim through the Home Office Allowance hinges on the frequency of your home-based work activities each month. This system spares you the complexity of calculating the exact portion of your home used for business purposes.

Simplified Expense Rates

Based on the hours you dedicate to business activities at home each month, you can claim the following flat rates:

  • 25 to 50 hours: £10 per month
  • 51 to 100 hours: £18 per month
  • 101 hours or more: £26 per month

It's important to note that these rates exclude expenses related to telephone and internet use. To claim a portion of these costs, you must calculate the actual expenses based on their business use. The HMRC provides a simplified expenses checker to help you compare potential claims using both simplified expenses and actual cost methods.

What Qualifies as Working from Home?

Working from home encompasses a range of activities, including:

  • Client work or tasks for your contractor
  • Tax calculations and filings
  • Organization of receipts and invoices
  • Any other work-related tasks

HMRC's main concern is the reasonableness of your home-based business use. Essentially, the time claimed should reflect the nature of your self-employment income. For instance, a freelance writer primarily working from home might claim over 40 hours, while an Uber driver, predominantly on the road, would likely claim 25 hours or fewer.

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