Landlords can claim some home office costs
- 16th July 2008
- Landlord Property News
Landlords that work from home might be able to claim allowances according to guidelines recently published by the Inland Revenue.
Though it has always been possible to claim additional home office expenses against income, there has historically been a very real danger of the taxman wanting it back through capital gains tax when the property is sold.
The new guidelines suggest that it may be possible to claim without incurring capital gains tax, however HMRC say that "each case will be dependent on the facts." So it would be wise to check with an accountant first.
The fixed costs that can be claimed are as follows:
- Insurance - if there is no separate business policy
- Council tax - a proportion of the total bill
- Mortgage interest - this does not include capital repayments
- Rent - A proportion of the rent of a home is allowed if it qualifies as being used for business purposes
- Repairs and maintainance - a proportion might be claimed for structural repairs such as replacing a roof, but not for decoration
Some of the above could be claimed if the following criteria are met:
- If an area of the home is used exclusively for business purposes and is in use during specific hours of the day. The room must replicate an office with PC, desk, chair etc
- A reasonable amount of time is spent in the office corresponding with traditional office hours
- The office are is not disproportionately large compared to the overall size of the house
It is possible that claiming the extra expenses could amount to several hundred pounds, however the Inland Revenue has stated that it will investigate if they feel the percentage claimed is too high.
Each case will be dependent on the facts.
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