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TonyTax
TonyTax, Tax Consultant
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First time doing self assessment and struggling on one key

Resolved Question:

First time doing self assessment and struggling on one key issue
Situatuation - I'm SE ( purposes) and work from home full time.
We live in a 2 bed house and 1 of the bedrooms is exclusively used as my office and not -work purposes at all.
On reading up about it, I understand I can claim deduction from our house rent. However I'm seeing two ways of calculating this - 1) by floor space and 2) by room, and unsure which to use.
Assuming kitchen/bathroom excluded, there are 4 rooms - 2 bedrooms, 1 lounge, 1 dining room
Rent is £800pm.
So do I say, 25% of house is used as work so take £200pm x 12 giving £2400?
then do I also use the 25% on working out broadband/elec/gas/council tax?
thanks!
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
.

Take a look at the HMRC notes starting here and examples on the use of a room in your home as your office. The secret here is not to go overboard as that will attract the attention of the tax office.

Example 2 in BIM47825 appears to be as close to your situation as you will find. If I were you, I'd be inclined to use floor space as opposed to the number of rooms claim such as yours. In the past, I've had tax inspectors tell me that is their preferred method. The example makes it fairly easy to work out the fixed costs such as rent,council tax, insurances. The same will apply to heating and lighting. On other expenses such as phone and broadband, unless these claims are very small, you will do better to try to apportion the bills based on actual business usage.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

Thanks - yep, had seen HMRC ones but was still in the dark really about whether % is allowed or not.

Now in my own case, the rooms (I'm assuming I exclude bathroom, kitchen and hall?) were pretty much 25% each of floor space anyway so is the claim still 'legit'?

Expert:  TonyTax replied 2 years ago.
I've seen lots of claims submitted by previous accountants by of taxpayers I've acted the room formula with no problems but if there is a sizeable difference between the area method and the rooms method, HMRC may take an interest. You should explain how you have formulated your claim in the white space in the core 8 page tax return or the self-employment pages. You would exclude the rooms you mentioned from the calculation.
Customer: replied 2 years ago.

Many thanks.

Final question - with this then, do I need to upload a spreadsheet? Also I I need to attach documents e.g. rental agreement, breakdown of bills?

Expert:  TonyTax replied 2 years ago.
You don't need to send documents to the tax office unless you are asked .

A breakdown of your claim attached to your return or a summary in the white space can be seen as a good thing or a bad thing. Some people see a breakdown as something to be shot at by HMRC and others as a way of avoiding the question being asked by HMRC by providing as much information as possible in advance. I tend to give a breakdown of the claim of home as office.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15839
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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