Guidance published for home worker expenses

Posted on 21 November 2008

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Her Majesty's Revenue and Customs (HMRC) has produced new guidance for homeworking contractors and other self-employed professionals who claim business expenses.

According to Paul Webb, technical director at Tax UK, professionals working from home for substantial periods should now find it easier to claim for reimbursement, as a definition for "fixed costs" – those which are required to run the home – has now been provided.

Meanwhile, writing for the Chartered Institute of Taxation (CIOT), he said that in order to qualify, professionals must spend a significant period of time working in a designated home office.

This can only be used for shared purposes, such as family internet use, for small amounts of time during the day.

In terms of the appropriation of costs, the area of the residence used for business purposes, the use of utilities such as electricity and the time spent conducting business activities in comparison to other uses are all relevant factors.

According to the Office for National Statistics, 12 per cent of the UK population were regularly or permanently working from home during the first quarter of 2008, representing a 20 per cent rise on 1998 figures.

Category: Tax & Legislation News

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