Business owners who work from home should ensure they're not missing out on tax relief after HM Revenue & Customs (HMRC) issued new guidlines allowing a proportion of household bills to be tax deductible.
A new range of allowable expenses has been introduced relating to 'fixed costs', which means that business owners who use their home as a workplace can now claim tax free relief on reasonable amounts of their mortgage interest, council tax, rent, home insurance and repairs and maintenance.
A percentage of household running costs may also qualify for tax relief including cleaning, heat, light and power, telephone, broadband and metered water charges.
To be eligible for the relief, an area of your home must be set aside exclusively for business purposes for a prescribed amount of time. According to HMRC "somebody who's working at their kitchen table or on their laptop in front of the TV" will not qualify. The amount claimed must also be "reasonable".
This means that even if you only use your home for minor business tasks like writing up records you can still claim tax relief, but it must reflect the actual amount of time worked at home. The amount of relief HMRC will allow is also based on the number of rooms in the house, excluding bathrooms, toilets, kitchens and hallways.
Full details and computations at http://hmrc.gov.uk
