Claiming home costs, have I got this right?

[jon-]

I think I've got this right, but I thought it would be worth checking (and it might be useful for others

I live in a rented house, which has 6 rooms (not including toilets and corridors, but including the kitchen)

I have one room dedicated to a home office which is used approximately 90% as an office, 10% as a clothes storage room.

Am I right in thinking I can claim 90% of 1/6th of the house costs, which would include rent, bills, council tax, insurance etc?

One slight grey area is because I had a PAYE job in 08-09 tax year I couldn't have been in the house all day. Do I need to claim a time percentage on the total? While I wasn't in the office 24/7, I did use it daily and having it setup as an office stopped anyone else living in the house, which obviously cost me.

Thanks

[jon-]

Eric Mc said:

Are you employed, self employed or operating a limited company?

In this case, self employed.

[jon-]

Eric Mc said:

If you are self-employed (or operating through a home based limited company), the costs are allowed if they are incurred "Wholly and Exclusively for the Purpose of the trade".
If you are an employee, the costs are allowed if they are incurred "Wholly, exclusively and NECESSARILLY in the performance of your duties".

So, my 90% 1/6th rule makes sense, as if I didn't have a home office, in theory, I could down grade to a smaller house?

[jon-]

Eric Mc said:

HMRC recommend that you -

add up your utility bills, Council Tax, Water Charges and (to a limited degree)household repairs and decoration costs and interest on your mortgage

work out the number of HABITABLE rooms in the house (NOT included are halls, utility rooms, bathrooms, garages etc). Most houses have between 5 to 7 habitable rooms.

divide teh total houseold costs by 1/5 to 1/7 (whichever fraction is appropriate) to arrive at the claimable figure

HMRC do not expect that the claim for such costs would be much over £800 in any one year. For most people the amount is more like £500 to £600. If you want to claim more, there is nothing to stop you, but HMRC might be curious to know how you have arrived at your figure.

1/6th of my rent would be 1700 alone..!

[jon-]

Eric Mc said:

There is nothing to stop you making the claim you think is appropriate. Just be prepared to have all your arguments in place to justify your claim if and when HMRC ask questions.

I presume HMRC are reasonable? My justification would be I could downsize on rent rates to a flat if it wasn't for a home office and a garage full of tyres!

[jon-]

Eric Mc said:

jon- said:

Eric Mc said:

There is nothing to stop you making the claim you think is appropriate. Just be prepared to have all your arguments in place to justify your claim if and when HMRC ask questions.

I presume HMRC are reasonable? My justification would be I could downsize on rent rates to a flat if it wasn't for a home office and a garage full of tyres!

Don't presume ANYTHING about HMRC.

Cryptic

In your experience would you see HMRC accepting the above reasoning? Where there are no strict guidelines you've always promoted the "reasonable" calculations, ie don't take the piss.

[jon-]

As always, thanks Eric.

[jon-]

Eric Mc said:

If you can justify it - make the claim.

If you make the claim on the grounds you think you can justify it, but then in a subsequent investigation HMRC don't fully agree with you are they likely to fine you or just ask for the tax back?

[jon-]

That sounds fair and reasonable, thanks.