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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I work from home at present and have a one bedroom self contained

Customer Question

I work from home at present and have a one bedroom self contained flat which I rent out for £750/month plus £100 for bills.
I am looking at moving my work into the flat. The main part of my work will be in the bedroom of the flat and I will be able to use the rest of the flat for work/family life.
I will loose the income from renting out the flat to work from the flat - how can I set this off against my business?
I would appreciate your input.
Teresa
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

The loss of the rent is irrelevant as far as your business is concerned. If you choose to use the flat as a home and for your business instead of letting, that's your choice. HMRC won't subsidise the loss of rental income.

What you can do is to make a claim in your business accounts for using part of your home for business purposes. If when you use the bedroom of the flat for business purposes and during the period when it is being used for business purposes, it is not being used for any domestic non-business purposes, then you can claim a proportion of the household expenses for the period the room is being used for business as a proportion of the total cost of that room. Usually, the amount you can claim will be based on the area used for business purposes as a proportion of the area of the entire accommodation and on the time it is being used solely for business purposes.

Take a look at the notes starting here for more information on the types of expenses you can claim a proportion of and how to work out your claim. There are some useful examples to guide you as well.

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 2 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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