Tax saving tips: How to claim working from home tax relief

Tax saving tips: How to claim working from home tax relief

July 16, 2024
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In today’s uncertain climate, it’s more important than ever for small businesses to make savings wherever they can.

For those working from a physical office, it can be easy to see where cuts can be made — perhaps you’re paying too much to heat the building, for example, or forking out for expensive equipment that’s barely used.

But how can you save money when you work from a home office or even your kitchen table? Like with mileage tax relief, working from home tax relief can help save you money over the year.


What is working-from-home tax relief?

The good news is that anyone who needs to work from home all or some of the time can claim tax relief on their household expenses. For employees, this means that those who can’t go into an office — either because of distance or because their employer doesn’t have one — won’t have to bear the brunt of increased phone and energy bills. And for the self-employed, such as small business owners, there are plenty of options too.


Is manual or a flat rate claim for you?

Like anyone else working from home, self-employed people can claim tax relief on a portion of their household bills. There are two systems to choose from, known as simplified and calculated expenses.

With the former, you work out what you’re entitled to based on a flat rate, which varies depending on how many hours you work from home. Currently, this is set at £10 per day for those working between 25 and 50 hours, going up to £18 for between 50 and 100 hours, and £26 for over 101 hours.

However, if you make a lot of telephone calls, say, or feel like the flat rate doesn’t cover the business portion of your utility bills. You can calculate your working-from-home expenses manually as well — although this can get complicated. Because you also live in your home, you can only claim for the percentage of costs that are associated with work.

You can factor in utilities such as heating, telephone and broadband, and electricity as well as council tax and mortgage or rent. To make this easier, there are free-to-use calculators available online that take into account factors such as hours worked, costs, and the number of rooms in your home.

Not claiming the correct expenses, or claiming less than they are entitled to, is one of the biggest mistakes that small business owners make when trying to cut down on costs. With a GoSolo Business Account, you can keep track of all your outgoings in one place, making it easy to stay on top of your finances all year round.   

A GoSolo Business Account helps entrepreneurs and small businesses manage their finances easily, pay on a Mastercard debit card, and save for taxes, invoices and potential future outgoings.


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July 16, 2024
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By GoSolo Better Business Account