Working from home and tax relief

AFAIUI, the proper tax treatment would be to fairly estimate which portion of the property is effectively used by the business and claim that percentage of the rent (and no more) as a business cost.

RM

There's no standard formula and you have to agree the proportion of your rent allowed for deduction (and other costs like heating, lighting, cleaning, insurance, decorating, furnishing) with your tax office. If you use one room exclusively for business, then normally you divide the costs by the total number of rooms in the house (exc kitchen, bathroom, utility room etc). If you use a room partly for business and partly privately (e.g. your sitting room is used daytime to meet clients), you have to work out the proportion of business use. In many cases something like 25% may be allowable. There may be capital gains liability for the part of the house used for business when you sell, minus the yearly exemption.

Alec

Bzzt! He's renting, so this issue will not arise.

Council tax I'm not sure about, but I believe utility bills can be claimed, proportionate to their proportion of business use. The IR tends to be less than generous about it, though, so the allowance may turn out to be less than the cost of the time spent pursuing it.

Jon

"Alec" wrote

... and also possibly **business rates** to pay on the area used exclusively for business ...