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

Premises used both as a home and as business premises

Section 94I provides for a fixed rate deduction to account for personal use where premises are used mainly for trade but also as a home.

• Where premises are used mainly for a trade but also as someone's home, a flat rate deduction for personal use can replace the normal apportionment approach under section 34(2).
• The deductible amount is the total premises expenses minus a fixed monthly amount for non-business use, based on the number of people living at or staying at the premises for non-trade purposes: £350 for one occupant, £500 for two, or £650 for three or more.
• If this fixed rate method is chosen for one set of business-and-home premises, it must also be used for any other premises that similarly serve as both a trade base and a home during the same period.
• The Treasury has the power to amend the monthly rates and rate bands by regulations.