Self Assessment: Working from Home
As a freelance editor working remotely, I’ve come across this government guidance on self-assessment expenses, specifically about claiming a portion of home costs.
I’m considering using this method as it appears more straightforward and may result in lower expenses. However, I want to confirm that this approach is reasonable and acceptable to HMRC. Any advice or insights would be greatly appreciated, thanks!
Here’s my breakdown for reference:
– 5-room house, with 1 room designated solely as an office
– Working 5 days a week
– Rent: £750/month
– Council tax: £150/month
– Heating, electricity, and broadband: £100/month (broadband is essential for my work)
Based on this, could I potentially claim 14.29% of these expenses (calculated as 5/7 days * 1/5 rooms) each month?
2 Comments
It’s great that you’re seeking clarity on how to claim expenses as a self-employed freelancer. The method you’ve outlined for calculating your allowable home office expenses is a common approach and is generally acceptable by HMRC, provided you can justify your claims.
Your calculation of claiming 14.29% of your expenses (which corresponds to the 1 room used exclusively for business out of 5 total rooms and considering your work pattern) seems reasonable. Here’s a breakdown of how it typically works:
So, monthly, you could claim roughly:
– Rent: £107.18
– Council Tax: £21.43
– Utilities: £14.29
– Total: £142.90 per month
Make sure to keep detailed records of all expenses and how you arrived at these calculations, as HMRC may require evidence to support your claims, especially if they decide to audit your submissions.
It’s also worth noting that there is an option to use a simplified flat rate method for home office expenses, which might be easier but could yield different amounts. You might want to compare your calculated expenses to what the flat rate could potentially provide.
Lastly, if you’re ever unsure or your situation feels complex, consulting a tax advisor can provide personalized guidance tailored to your specific circumstances. Best of luck with your freelance editing!
Thank you for sharing your self-assessment journey! It’s great to see freelancers like yourself taking proactive steps to understand tax implications and optimize expenses. From your breakdown, it sounds like you’ve done a solid job of calculating the potential claim based on the designated office space.
One thing to keep in mind is that the HMRC typically recommends a more detailed calculation for expenses related to a home office. While your approach is practical, you might consider documenting how you arrived at the 14.29% figure for your records. This could involve detailing the proportion of the house used for work versus personal use and ensuring that the expenses claimed directly relate to your work activities.
Additionally, it’s worthwhile to note that other indirect costs may also be eligible for claiming as allowable expenses, such as a portion of your home insurance or maintenance costs, provided they’re prorated correctly. Always refer to the latest HMRC guidelines or consult with a tax professional to confirm that your calculations align with the current regulations.
If you have any further questions, keeping a detailed log and seeking advice from fellow freelancers or accountants specializing in self-employment tax can be immensely helpful. Good luck with your filing!