Working from home tax efficiently

If you need an office at home for your business or you need to store your stock in your garage here’s some ideas to get the taxman to pay for some of the costs.

Self employed
You can claim for the additional costs of working from home. So, apportion the variable costs of running your home (gas, electricity, water, insurance etc) by the numer of rooms used (including a garage for storage, if appropriate). E.g. if you use 2 rooms out of a total of 6 then claim for one third of these costs.

Employed
This is more difficult to claim for than the self employed. However, our favourite solution is to rent the room(s) to the company. It means you have to fill in the rental pages on your tax return but you do get to claim for an appropriate part of the costs (including council tax, mortgage interest) which should elminate any tax bill (if you set the rental levels correctly!). We would also recommend having a written rental agreement in place, just in case the taxman comes knocking.