If it is necessary for you to work at home and not just for conducting additional work outside of the office, then you are entitled to £4 a week cover without having to report it on your P11D. However, note that when you exceed the prescribed limit, your claim may come under suspicion from HMRC, so only make one if its absolutely necessary.
When claiming you will need to provide proof of a fully functional and exclusively designated work space, and that you actually use this work space for your business. Because your house is used as both a business and personal space, its practically impossible to calculate how much gas, electricity and insurance cover your business area consumes.
To get around this you can base your claim on actual costs, which may include:
- Metered light and heat
- Calls made on your home telephone
- Insurance, if there is business equipment insured under that policy
- Repairs if incurred on business equipment
- ISP/broadband costs, subject to the contract
- A proportion of the cleaning costs of your workspace, if the work is of the type that requires extra cleaning.
As directors are treated as employees you cannot claim:
- Mortgage interest or rent
- Water rates
- Expenses that do not have receipts i.e. cash wages of a cleaner.
You have to make a genuine and proportionate estimate with regards to whats actually being used for business.
For example, a four room house in which one room is designated to your work will usually allow you to claim a quarter of the total relevant expenses, as long as a lease agreement has been arranged between you and your company for your company to rent the office from you.
If you work from home and are the companys only staff member you can claim a proportion of your council tax cost. However, depending on how much you use your home for business, you may have to pay business rates rather than council tax.