Self-employed individuals (contractors, sole traders, partnerships, or company owners) running a business from their home can claim the parts of their home used for business as an expense.
Any space in your home that is primarily used for the purpose of running your business can be claimed. This may include certain rooms such as a home office, a workshop, or a garage used to store stock. Parts of your home left for personal use cannot be claimed. The amount you can claim depends on the measurement of the space allocated for business use. This is calculated as a percentage of the total space in your home. For example, if you use 15% of the space in your house for business purposes, you can claim 15% of household expenses, such as:
- insurance,
- rates,
- rent,
- power.
A percentage of the interest you pay on your mortgage can also be claimed if you own your house. However, repayments of the principal amount you owe cannot be claimed.
When running your business from home, business-related phone calls can also be claimed under the following circumstances:
- Businesses that use a home landline for business-related calls can claim 50% of the line rental.
- If a separate phone line is used for business calls, 100% of that line rental can be claimed. In this case, nothing from your home landline can be claimed.
- If a mobile phone is used for business calls, the cost of any business calls made can be claimed. In this case, individuals should record details such as the date and number they called, the reason for the call, and how much it cost.
Individuals running their business from home should keep a record of all their expenses as evidence and to calculate the percentage of business-related costs, apportioned from personal home expenses. Records can include receipts, logs and documentation related to the business.
