Use Of Home As Office – Claim Deductions

January 15, 2023


30% of the workforce in the UK works remotely once a week. Unfortunately for such workers, the home office tax deduction is no longer available (talk about an unlucky sequence of events). But, fortunately for you, if you own a company. That implies this income tax deduction is still accessible.

Working from home has many advantages. Setting up a distinct area as a home office to provide the ideal environment for concentrated work is worthwhile. Furthermore, working from home, furniture, and office equipment may all be claimed as tax-deductible home office costs in certain situations.

In this blog, we’ll teach you what to look for when contemplating tax breaks for working from home. Because claiming the tax deductions might result in further tax savings this year and in the future.

So, here’s everything you need to know about using your home as office taxation.

What exactly is a “Home Office”?

Let us first define “home office.” Your home office isn’t a coffee shop, library, or coworking place. A home office is a room in your house. However, this does not imply that it must situate within your home.

For the home office deduction to apply to your office space, you must meet two essential requirements.

They are as follows:

  • You utilize the workplace regularly and only for business purposes.
  • Your home office is the “primary location” of your company.

However, these standards are tighter than most people believe. The need for “regular and exclusive usage” includes after-hours use. If you’re the only one utilizing the office during regular business hours, that’s fantastic.

To be eligible for work-from-home tax deductions, you must fulfill the following conditions for home use from the HM Revenue and Customs (HMRC):

  • The desk at which one works must serve as the single and permanent site for all business activities.
  • Use of the workplace must apply entirely and regularly for business transactions with patients, clients, or customers.
  • The workspace must be a separate building that is not related to your residence and is used solely and frequently for trade or commerce.
  • Retailers and wholesalers must utilize the workspace regularly to store inventory or product samples.
  • For renting purposes; or
  • As a childcare center.

When does working from home become tax deductible?

Not every office space with a desk is immediately eligible for tax breaks. Some conditions must be completed to claim expenditures for a home office.

The following are some prerequisites you must meet:

  • You must use your home office regularly and exclusively for business activities. That implies you can’t claim a tax deduction if you work at the family dining table in the mornings or nights.
  • Additionally, to qualify, the desk space must be utilized primarily for business purposes. If you regularly meet and greet customers in a separate room, this might be a write-off.
  • Storage, daycare facilities, and separate buildings are all often exempt from taxation if utilized only for company reasons.
  • Your primary location of the business must be your home office. That is, if you work away from your home office and use it sometimes to fill out paperwork, you may be unable to claim costs for the space.

Expenses related to working from home: what may i deduct?

To deduct the costs of working from home, you must understand what expenditures are allowable.

Among the expenses that may be deducted are the following:

  • Bills for utilities (gas, electric, water)
  • Buildings and contents insurance
  • Bills for telephone, internet, and mobile phones
  • a portion of your monthly rent or mortgage
  • Security expenses
  • Repair expenses
  • Office Supplies Office furnishings
  • Travel expenses
  • Personnel expenses
  • Fees for advertising/marketing and training

Employee and employer tax deduction in the home as an office in the UK

As previously stated, if you are self-employed, you can deduct a percentage of your home office expenditures from your income. However, if you are an employee, your company may only deduct these costs if they are deemed business expenditures.

This deduction may be substantial and can save you a lot of money on your taxes. However, it is crucial to remember that this deduction is only accessible if you work from home regularly. You cannot deduct your home office expenditures if you work from home occasionally.

Other deductions are available to persons who work from home, but the employer deduction is the most important. If you are self-employed, take advantage of this tax break. And if you are an employee, check with your boss to see if they can deduct your home office expenditures.

When working from home, how do you deduct your expenses?

You may claim tax reduction on your home office using the self-assessment tax return forms. If you are self-employed, you may deduct your home office expenditures in the relevant part of your self-assessment form, either online or on paper. You may submit either the total costs or a comprehensive breakdown of expenses. Limited liability firms must file a corporate tax return.

It’s a good idea to maintain track of any costs you wish to deduct while working from home until the end of the year and file them carefully in case the HMRC conducts future external audits.

Bottom Line

Each year, home office tax deductions are decided, and eligibility may fluctuate. When documenting costs for tax write-offs, it is crucial to get assistance from a financial professional on whether expenses qualify for home office deductions.

Choosing the approach with the most significant expenditure deductions would also help your company.

The Simplified technique is more uncomplicated and less complicated, but it may not give the most significant tax deductions for boosting corporate income.

Worried about how to claim the use of the home as an office deduction?

Do not worry! GJM. & Co. is here to assist you in filing your home as an office tax deduction. Our expert accountants and tax professionals will not only guide you through the taxation policies but also help with tax filings.

Should you have any queries or need consultation, Schedule a Call today or write to us at