Working from home is one of the great joys of being self-employed. Gone are the days of rush-hour traffic and races against the clock - now you can just roll out of bed, brush your teeth, and welcome the day at your own pace.

Of course, working from home isn’t quite as easy as that, and brings with it a series of unique challenges that you wouldn’t have faced in your old 9-to-5 role. Expenses are one such challenge - working out what you can and can’t claim (or if you can claim anything at all) can feel a little daunting, but it needn’t be.

At Crunch, we’ve helped thousands of self-employed people understand what they can claim as an allowable expense when they work from home. The rules are slightly different for limited companies and sole traders, though, so before we get going, please remember to visit our “Working from home? What you can and can’t claim as an expense” article if you have any questions about how to claim home office expenses.

The expenses test

There’s a simple test that you can apply to any item you wish to claim as an allowable expense: can you prove that this purchase was made “wholly and exclusively” for business purposes?

Let’s say, for example, you buy a comfy new chair for your office, which you’ve set up in your spare room. Because that chair is “wholly and exclusively” for work purposes - i.e. you’ll only be sitting in it when you’re working - you can claim it as an allowable expense. 

However, if you’re doing up the kitchen and invest in a new oven, you cannot claim it as an expense. It might be under the same roof as your home office, but you’d be hard-pressed to prove it was “wholly and exclusively” for work purposes, no matter how many cookies you baked in the shape of your company logo.

So what can I claim?

With the expenses test now at our disposal, the task of sifting through allowable home office expenses becomes a little easier. Here are just some of the items you could claim:

• Desks and office furniture

• Stationary and business cards

• Work PCs and/or laptops

• Printers and inkjets

There are a couple of more complex areas you could claim as an allowable expense, such as broadband and phone bills.

In terms of your broadband, generally speaking, you can’t claim this as an allowable expense, given how difficult it is to prove that the service is “wholly and exclusively” for business purposes. The exception to this is if there is a separate broadband line that runs into the office part of your home to provide a broadband connection solely to your office space. Only then can conclusively show you meet the requirements of HMRC’s expenses test.

As for your phone bills, you can claim these if you set up the contract between your business and the service provider. You’ll then be eligible to claim back the cost of the unit and the phone bills as a business expense. Any personal calls taken or made on your business phone will be seen as a tax-free ‘benefit in kind’, and will need to be reported on your P11D.

The only twist here is that many phone providers will impose a business tariff, which may ultimately prove more expensive.

As we mentioned earlier, the rules around how you can claim home office expenses differ between limited companies and sole traders, so please check out our “Working from home? What you can and can’t claim as an expense” article for all the information you need.

If you’re ever in any doubt over whether you claim something as a business expense, it’s always best to check with your accountant. If you’ve not got one, we can help there, too! Come and check out our online accounting services at crunch.co.uk and book a callback with one of our experts to see how we can help you grow your business.