Use of home as office limited company calculator

Use of home as office is the share of a director's household costs the company can bear because part of the home is used for its work. There are two ways to work it: the flat rate HMRC accepts without evidence, £6 a week, per gov.uk, or an apportioned share of the actual running costs by rooms and by the time the room is used for business. This calculator works the apportioned figure from what you type, prints the flat rate beside it and shows the difference and the corporation tax the claim saves, because the question is never whether to claim but which method is worth the paperwork.

Apportion by rooms and then by time

Count the rooms excluding kitchen and bathrooms, take the share of the annual running costs that one room represents, and then take the share of that room's time that is business use. A room used eighty percent for work in a five room home carries sixteen percent of the household costs. The calculator does exactly that sum and nothing more clever, because that is the method HMRC's guidance describes.

Which costs go in, and which do not

Rent or mortgage interest, gas, electricity, water, council tax and home insurance are the usual running costs. Mortgage capital is not a cost. Broadband and phone are claimed on the business proportion of the bill rather than by room. A room used exclusively for business risks capital gains tax on the home when it is sold, which is why the business use percentage in this calculator is rarely a hundred.

The flat rate is the floor, not the answer

£6 a week, £312 a year, is what HMRC accepts from an employee working from home with no evidence, and it is what most one-person companies claim because the paperwork for the apportioned figure is not worth the difference. The calculator prints the difference so that call is made on a number. Whichever method, the company pays the director and deducts it for corporation tax; the director is not taxed on it.