Income Tax (Trading and Other Income) Act 2005 section 94H

Use of home for business purposes

Section 94H provides a simplified flat-rate deduction method for traders who use their home, or a partner's home, for business purposes, as an alternative to claiming actual expenses.

• Traders may choose a fixed monthly deduction instead of claiming actual home-use expenses, based on hours of qualifying work done at home: £10 for 25+ hours, £18 for 51+ hours, or £26 for 101+ hours per month.
• Qualifying work means work done wholly and exclusively for the trade by the person, a partner, or an employee at the home — but where more than one person works simultaneously in the same home, the hours count only once.
• If the trader or a partner has more than one home, all homes are treated as a single home for the purposes of calculating the deduction.
• Where a partnership opts for the flat-rate deduction in respect of one partner's home, it must use the same flat-rate method for every other partner's home used for that trade — it cannot mix methods.