Managing my business costs while working from home

My utility bills have doubled since lockdown because I’m now working from home. Can I claim my electricity bill through my business?

If you work from home, you can claim a proportion of your utilities bills as a business expense. This can be done on an actual basis, usually by reference to the area used for business purposes (like your spare room, or home office). Or you can calculate costs by using HMRC simplified expenses rates.
If you work from home for more than 25 hours per week, you can claim the following flat rates:

Hours worked from home: 25-50 = £10 per month
Hours worked from home: 51-100 = £18 per month
Hours worked from home: 101 or more = £26 per month

So if you worked from home for 35 hours a month for 10 months, and 70 hours for 2 months you could claim £136 (10 x £10 + 2 x £18)

The schools are closed and I’m juggling working-from-home with looking after my kids - so I bought them a trampoline to keep them busy. Is this a business expense?

Sadly not. To be considered a business expense, the cost must have been incurred wholly and exclusively for the purposes of the trade, profession or vocation. As the trampoline has been bought to keep the kids entertained, it fails the ‘wholly and exclusively’ test and isn’t a business expense. You’d have to jump through a lot of hoops to get a trampoline past HMRC (sorry).

Since lockdown I’ve kitted out my spare bedroom with lots of home office kit: laptop stand, wireless keyboard, bluetooth speaker and magic whiteboard paper for the walls. Are all of these business expenses?

Good news. If you’re self employed and these costs have been incurred wholly and exclusively for business purposes, they are business expenses. If you’re an employee, your employer may reimburse you for the costs tax free – provided there is no significant personal use.

Since I’m no longer in the office, I don’t get my usual Greggs sandwich every day. So I’ve been treating myself to the odd Deliveroo. I’d normally claim lunch costs when I’m out and about - can I claim my home Deliveroo?

Nope. The purchase of food and drink while working from home fails the ‘wholly and exclusively test’, because HMRC takes the view that you eat and drink to live – not just to undertake your work.

I miss my Pret coffee, so I bought a coffee machine in April. I keep it in my home office, and my wife doesn’t drink coffee (so it’s just for me). Can this count as a home office business expense?

This wouldn't be an allowable expense for the same reason that ordering a Deliveroo isn’t. If an employer purchased a coffee machine for the office, it would be an allowable expense under Staff Welfare – as long as it stayed in the office, and was used by everyone. But the rules are more stringent if you’re self employed. 

I’ve heard that electric scooters might be legalised soon to allow people to travel to work without using public transport. If I buy a scooter to get to my co-working office and to meetings, can I put this through my company?

Interesting question. This would be subject to future legislation following the outcome of the proposed trials. It’s not possible to answer this question until the relevant legislation has been passed.

If you bought a bicycle for the same purposes, it would be classed as Plant and Machinery and provided your expenditure on Plant and Machinery has not exceeded the Annual Investment Allowance limit (£1 million up to 31 December 2020, and £200,000 from 1 January 2021) you would be able to deduct the cost of the bicycle from your annual profits. The cost of any cycling safety equipment can also be claimed as a deduction.
If the bike was used for non-business purposes like leisure use or commuting between your usual place of work and home, the amount claimed would be restricted to the amount of business use only.

Back in March I bought a 3 month travel card to get to work, but I’ve barely used it since lockdown. I’m not sure whether I can get a refund, but I bought it through my business. If I haven’t used the travel card for work purposes, is it still a business expense?

Travel between your home and usual place of work is classed as commuting, and is not a business expense. But if your work involves visiting clients at their premises and the travel card was purchased so you could make these visits as part of your job, it would be classed a travel expense and can be claimed back.