How to reduce your tax bill: Expenses claims for home working

Working at home is becoming commonplace, both for the employed and the self-employed worker. New guidance has emerged from HMRC to help self-employed people who work from home claim business expenses, especially if they work from their own primary residence for a substantial portion of their working time. Paul Webb from the small business tax experts, Robert James Partnership, explains how this legislation works and what business owners can do to claim their full entitlements.

Who does the guidance apply to?

The first thing which should be understood is that this new guidance only relates to self-employed individuals, i.e. sole traders and partnerships. It doesn’t apply, for example, to a company director working from/at home, or an employee who is required to carry out work for an employer from home. In these instances, separate regulations for home working expenses continue to apply as they always have.

What are the new 'fixed costs'?

HMRC has introduced the concept of fixed costs as part of its attempt to clarify the law.