Use of Home

Many small business start life from home - depending upon the business, it is relatively quick, easy and cheap.  When you run a business and use your own home for running the business from, you are entitled to make a claim for tax relief on a proportion of the running costs.

Usually, there are a couple of factors that determine how much you can claim:

1. Your household running costs.  If you are self employed, these include gas, electric, council tax, water rates, mortgage interest and home insurance.
2. The extent to which you use your home for running your business, which is usually determined on the number of rooms used out of the total rooms.

Therefore, in general terms, the higher your household running costs, the higher your claim for use of home.

NB if you run your business through a limited company, the approach is slightly different, in that the director is effectively renting part of his home to the company.

Please see here for more information and detailed examples.