How much rent can I claim on my Tax Return?

The most commonly asked question we get asked is “how much rent can I claim on my tax return?”

In this post we explain what you can actually claim for…

We’ve heard various stories lately (some horror!), from people who are including a cost on their tax return for using their home as an office – claiming anywhere from £5 per month to over £800 per month.

So, how much rent can you actually claim on your tax return?

The first thing to remember is that you can only include a cost for using your home as an office if you do actually use it for work purposes. Sleeping doesn’t count 🙂

The most informative guide we have found is from HMRC themselves. You can read more on their advice here – ‘BIM47825 – Specific deductions: use of home: examples’

For the majority of people, we would suggest that a reasonable estimate as in Examples 1-3 would be acceptable by HMRC, but you should always ensure that you are not claiming too much (or too little) by using the same calculation as in Example 4.

Dependent upon your usage, we would suggest that £2 per week may be too little nowadays so it is always worth checking by doing your own calculation or by speaking with an experienced accountant who can talk through it with you.

Always remember, just because your friend or someone you know has not had HMRC question their tax return it doesn’t mean it’s not going to happen.

If/when HMRC do look into their return and they’ve included an excessive amount, the additional tax and interest can be significant, along with penalties of up to 100% of the underpaid tax amount.

As always, we’re here to help so please don’t be afraid to ask us any questions and we will be happy to run through the calculations with you.

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