If you are running your rental property business from home, then make sure that you are aware of the expenses that you can claim for the costs of working from home. Find out more by reading below.

What do I need to know?

If you are managing your property rental business from home, then this will increase your household expenses such as your gas and electricity bill.

You can claim a deduction for your expenses when working out the profits of the rental business.

What are the rules?

The basic rule is that an expense must be wholly and exclusively related to the rental business for it to be an allowable expense.  

When expenses are wholly and necessarily incurred, a deduction can be claimed for the actual expenses. This will take a lot of working out as household bills will not be split between personal and business expenses.

Make sure that you keep all records together with calculations of the expenses.

What are simplified expenses?

If a landlord spends more than 25 hours a month managing the business from home, then simplified expenses can be used to work out the deduction for the additional costs of working from home. The expenses will depend upon the number of hours worked in the home each month. The deduction will be reduced as a flat amount monthly.

  • 25- 50 hours of business use = £10 per month flat rate
  • 51-100 hours of business use = £18 per month flat rate
  • 101 hours or more = £26 per month flat rate

The total hours worked at home are by anyone in the property rental business.

Example

Ross runs his property rental business from his home. In 2019/20 he spends 60 hours a month working on the business apart from the months of June and October, which he spends 30 hours a month working on the business.

Ross is able to claim a deduction of £200 for the expenses of running the business from home (10 months @18 plus 2 months @10).

Be aware that the simplified expenses rule does not cover telephone and internet, which can be claimed in addition to the simplified expenses.

Further Actions

Make sure that you are aware of what expenses you are entitled to claim from running your business from home.        

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