Self Assessment: Working from home

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?

1 Comment

  1. bdadmin

    Reply

    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:

    1. Rent: For your rent of £750 per month, you could claim approximately 14.29% of that, which would be around £107.18.
    2. Council Tax: For the £150 council tax, 14.29% would be about £21.43.
    3. Heating, Electricity, & Broadband: For the £100 on utilities, again, 14.29% would be approximately £14.29.

    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!

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