For self-employed individuals, working from home offers convenience, flexibility, and cost-saving benefits. Not only does it eliminate the need to rent external office space, but it also allows you to claim part of your household expenses as business costs. These deductions help reduce your tax liability and make your business more financially efficient.
Understanding which expenses qualify and how to calculate them accurately is crucial for making legitimate claims. This guide explores the types of home expenses that can be offset, the calculation methods accepted by HMRC, and how to track and report these costs effectively.
What Are Allowable Work-from-Home Expenses?
When your home functions as your primary place of work, various running costs may qualify as allowable business expenses. These expenses must be incurred wholly and exclusively for business purposes, though when working from home, this usually means claiming a reasonable proportion rather than the full amount.
Common Household Expenses You Can Claim
- Heating and lighting
- Water bills
- Council tax
- Mortgage interest or rent
- Property repairs and maintenance
- Broadband and telephone services
These costs are considered part of the general running of the home and can be partially attributed to your business use.
Calculating the Business Proportion
Because home expenses are shared between personal and business use, you must use a fair method to work out the business-related portion. HMRC accepts two main approaches: the number-of-rooms method and the time-spent method.
Number-of-Rooms Method
If your home has several rooms and you use one exclusively or regularly for work, you can divide the total annual expenses by the number of rooms (excluding bathrooms and kitchens) and claim the relevant portion.
For example, suppose your home has seven rooms and you use one of them for business. In that case, you would divide the total annual household expenses by seven. If the total annual cost is £11,398, the claimable portion is £1,628.
Time-Spent Method
This method adjusts the claim based on how many hours a week you use the space for business. First, calculate the proportion of the house used for work, then divide this figure by the total number of hours in a week (168) and multiply it by your working hours.
If you work 30 hours a week from home, the calculation would be:
£1,628 ÷ 168 × 30 = £290 per year
This method is especially useful if you don’t use the space for business all the time.
Fixed and Variable Costs
Understanding which household expenses are fixed and which vary depending on usage helps with accurate calculations.
Fixed Costs
These include mortgage interest, rent, and council tax. They do not fluctuate based on how much time you spend working at home, but you can still claim a portion based on your usage.
Variable Costs
These include electricity, gas, and water. These costs often increase with home working, so the amount you can claim will depend on your actual business use.
Sample Expense Breakdown
Let’s look at an example using the number-of-rooms method:
- Annual mortgage interest: £6,798
- Heating and lighting: £2,400
- Council tax: £1,750
- Water rates: £450
- Total: £11,398
Using one room in a seven-room home for work:
£11,398 ÷ 7 = £1,628 annually claimable
Now using the time-based method, for 30 hours per week:
£1,628 ÷ 168 × 30 = £290 per year
Repairs and Maintenance
Repairs to your home can also be claimed, but the rules vary depending on which parts of the property are involved.
- Repairs to the entire home: You can claim a portion that reflects the business use of the home.
- Repairs only in your workspace: These can be claimed in full.
- Repairs unrelated to your workspace: These are not allowable.
If you repaint your home office or replace a carpet specifically in that room, those costs are fully claimable.
Shared and Multi-Purpose Spaces
If your workspace doubles as a spare room or study, be cautious when making claims. Using a room exclusively for business may affect future Capital Gains Tax liability when you sell your home.
To avoid this, ensure that rooms used for work serve multiple purposes. For example, a desk in a dining room or a foldaway office in a guest bedroom keeps the space dual-purpose. This approach maintains your eligibility for full Private Residence Relief on the eventual sale of your home.
Telephone and Internet Costs
The telephone and internet are essential tools for many home-based businesses. These can be claimed based on actual business usage.
- If you use your landline for both personal and business calls, keep a log of business calls and calculate the proportion of the bill.
- For broadband, estimate the business usage percentage. For example, if 50 percent of your internet use is business-related, you can claim 50 percent of the bill.
Keeping accurate logs and evidence of business use will support your claims if questioned.
Council Tax and Insurance
Council tax can be apportioned using the same method applied to rent or mortgage interest. Similarly, if you have home insurance, and it covers your business activity, a portion of the premium may be allowable.
If you purchase separate business insurance (e.g., public liability or professional indemnity), the full cost is claimable as a business expense.
Documentation and Evidence
Accurate record-keeping is essential. You should retain:
- Utility bills
- Rent or mortgage statements
- Council tax bills
- Receipts for repairs and maintenance
- Telephone and internet statements
A spreadsheet or accounting software can help you maintain accurate and organised records. In the event of an HMRC query or inspection, having detailed evidence ensures that your expense claims are justifiable.
Annual Review of Expenses
Reassess your work-from-home expense claims annually. As your business grows or your home setup changes, the percentage of home use for business may increase or decrease. Updating your calculations ensures accuracy and compliance with tax regulations.
Simplified Expenses for the Self-Employed
Calculating exact business use of household expenses can be complex and time-consuming for self-employed individuals working from home. As an alternative, HMRC offers simplified expenses, a flat rate system designed to make it easier to claim certain home working costs without detailed calculations.
Simplified expenses are optional and only available to sole traders and ordinary business partnerships, not limited companies. They apply to utilities and similar household expenses but exclude phone and internet usage. This method is ideal for those who want to save time and reduce the burden of record-keeping while still claiming a reasonable amount for home working.
How Simplified Expenses Work
Simplified expenses allow you to claim a flat monthly rate based on the number of hours you work from home each month. Instead of dividing household bills by rooms or hours, you select a pre-set amount determined by your working hours.
The Hourly Bands and Allowances
HMRC sets out the flat rate allowance as follows:
- 25 to 50 hours/month: £10/month
- 51 to 100 hours/month: £18/month
- 101+ hours/month: £26/month
These rates cover utilities such as electricity, heating, lighting, and water, but do not include telephone and internet charges. You will still need to calculate and claim these separately.
Example Calculation
If you work from home 35 hours per month for an entire tax year (12 months), you can claim:
35 hours falls into the 25–50 hours band = £10/month
12 months × £10 = £120 total annual claim
If your hours increase later in the year, the allowance can be adjusted. For instance, working 60 hours per month for the second half of the year qualifies for £18/month. So the revised calculation becomes:
- First 6 months: 6 × £10 = £60
- Last 6 months: 6 × £18 = £108
- Total = £168
Eligibility Criteria
Simplified expenses are only available under specific circumstances. You must meet all criteria to use this method for your home office claims.
Sole Traders and Partnerships
Only individuals operating as sole traders or in partnerships where none of the partners is a company can use simplified expenses. Limited companies are excluded from using this flat rate option.
Minimum Working Hours
You must work a minimum of 25 hours from home per month. If you fall below this threshold in any given month, you cannot claim the flat rate for that period.
Shared Workspaces
If multiple people in the household use the same home for different self-employed businesses, each can claim simplified expenses separately, provided they meet the minimum hour requirement and have distinct business activities.
What’s Covered and What’s Not
Simplified expenses help cover a proportion of household costs that increase with home working. It’s important to understand what is and isn’t included in the flat rate to ensure accurate claims.
Covered by Simplified Expenses
- Heating
- Electricity
- Gas
- Water rates
- Council tax (in part, by implication through utility coverage)
Not Covered
- Mortgage interest or rent
- Telephone calls
- Internet access
- Property repairs
- Insurance premiums
For these excluded items, you need to calculate the proportion of use and claim them separately. This might involve logging call records, internet activity, or dividing repair bills based on the space used for work.
Switching Between Methods
You’re not locked into simplified expenses for the lifetime of your business. You can choose to use the simplified method in some years and the detailed method in others, depending on your circumstances.
However, you should remain consistent within a tax year. Switching between methods midway through a single year can lead to confusion and may draw scrutiny from HMRC. Review your setup annually to determine which method is most beneficial.
Decision Factors
- Use simplified expenses if you want to save time and do not use a large amount of utilities for business.
- Use actual expenses if your home business consumes a lot of energy or space, as this could lead to higher claims.
Advantages of Simplified Expenses
There are several benefits to choosing this method, especially for smaller businesses and those new to self-employment.
Reduced Administrative Burden
With simplified expenses, you avoid the need to collect, sort, and analyse utility bills. The flat rate system allows for quick and easy claims based on hours worked.
Predictable Claims
Flat rates make it easier to forecast your tax deductions over time. This predictability can help with cash flow planning and preparing for your tax return.
Suitable for Inconsistent Working Patterns
If your working hours fluctuate throughout the year, simplified expenses accommodate changes by allowing month-by-month adjustments.
Limitations and Risks
Despite its convenience, simplified expenses may not always offer the highest deduction. For home businesses with significant energy consumption or those occupying a larger space in the home, the traditional method may yield better financial results.
Lower Potential Claims
Flat rates may fall short compared to actual costs. For example, a business that uses specialist equipment or has long operating hours may incur higher utility bills, making the flat rate less advantageous.
Need for Additional Calculations
Since simplified expenses exclude internet and telephone usage, these still require itemised calculation. For some, this may undermine the time-saving benefit.
May Not Cover All Business Models
Home-based businesses with complex or high-cost operations may find simplified expenses too limiting. The system is tailored more for consultants, freelancers, and other service-based businesses with lower overheads.
Hybrid Approach
A combined strategy may work well in practice. Use simplified expenses for general utilities and calculate actual expenses for internet, phone, and mortgage interest. This hybrid method provides a balance between simplicity and accuracy.
For instance, you could claim £18/month using simplified expenses for working 60 hours/month, while also separately calculating:
- 60% of monthly broadband costs
- Business percentage of mobile phone bill
- 1/7th of annual mortgage interest
Combining these different methods lets you tailor your claims to your unique business situation.
Recording Hours Worked
Because simplified expenses depend on the number of hours worked from home, you must maintain accurate records of your working schedule.
Keeping a Log
Use a calendar, spreadsheet, or time-tracking software to log the hours worked each month. This documentation can be critical if HMRC requests evidence.
Variable Working Hours
If your work hours vary significantly, maintain monthly logs and apply the flat rate accordingly. It’s important to match the claim with your actual working pattern.
Consistency Matters
Avoid rounding or estimating hours without supporting evidence. Consistency and transparency in your log entries help ensure compliance.
Claiming Simplified Expenses in Your Tax Return
When filing your Self Assessment tax return, simplified expenses are entered in the self-employment section. Use the flat rate amounts for each qualifying month and sum them for the total annual deduction.
You do not need to submit detailed receipts for these specific costs but must retain your hour logs in case of future audit.
Software and Digital Tools
Many accounting platforms allow users to toggle between simplified and actual expenses. Choose one that supports HMRC reporting formats to make the process easier.
Example Annual Entry
Suppose you worked from home 60 hours/month for 12 months:
- Flat rate: £18/month
- Annual claim: 12 × £18 = £216
Enter this figure in the allowable expenses section of your tax return under “Use of home for business.”
Travel and Subsistence Expenses for the Self-Employed
When you’re self-employed and working from home, your primary place of work is typically your residence. While you won’t be claiming for a daily commute, you can still deduct the cost of travel made solely for business purposes. This includes client visits, attending training courses, We’ll explore what constitutes allowable travel and subsistence expenses, how to calculate them accurately, what documentation is required, and the rules governing each type of expense.
Defining Business Travel for Tax Purposes
Business travel refers to journeys made wholly and exclusively for work-related reasons. The purpose of the journey must be directly connected to the operation of your business. Common examples include:
- Visiting clients or customers
- Traveling to suppliers or service providers
- Attending business meetings or trade events
- Going to coworking spaces or temporary work sites
- Trips for training and education directly related to your business
Journeys that mix business and personal purposes should be avoided in claims unless a clear distinction can be made. HMRC scrutinises any blended travel expenses and may reject those that lack full justification.
What You Can Claim Under Business Travel
Mileage for Personal Vehicles
If you use your own car, van, motorcycle, or bicycle for business travel, you can claim mileage at HMRC’s approved flat rates. These rates cover the cost of fuel, wear and tear, insurance, road tax, and servicing.
HMRC Approved Rates:
- Cars and vans: 45p per mile for the first 10,000 miles, then 25p thereafter
- Motorcycles: 24p per mile
- Bicycles: 20p per mile
These flat rates simplify claims and remove the need to keep fuel receipts or calculate vehicle depreciation. However, you must keep detailed mileage logs for every journey.
Example:
If you drive 7,500 miles in a year for business:
7,500 miles × 45p = £3,375 allowable expense
If you exceed 10,000 miles:
10,000 × 45p = £4,500 2,000 × 25p = £500 Total claim: £5,000
Public Transport
You can claim for the full cost of public transport tickets used exclusively for business. This includes:
- Train fares
- Bus tickets
- Underground travel
- Tram journeys
- Ferry rides
If you travel frequently on public transport, keep digital or paper records of all tickets. Season tickets can be claimed proportionally if used partly for personal travel, though this requires clear breakdowns.
Air Travel
Flights booked for business purposes are fully claimable. These may be domestic or international. To justify the expense, maintain:
- Booking confirmations
- Boarding passes
- Itinerary showing business purpose
- Evidence of meetings or events attended
Business-class or first-class tickets can be claimed, but HMRC may challenge them if cheaper alternatives would suffice for the same outcome. A reasonable and justifiable choice of ticket is advisable.
Taxis and Ride-Hailing Services
Taxi and app-based ride services like Uber or Bolt are allowable when:
- Public transport is unavailable or impractical
- You’re transporting heavy equipment or documents
- The journey is time-sensitive and business-critical
Keep receipts or app invoices as proof. Claims should be proportionate and not excessively luxurious.
Parking and Tolls
Parking charges for business travel can be included in your claim. Tolls, such as those for bridges and motorways, are also allowable. Congestion charges may also qualify if incurred for business trips.
Fines for parking violations or speeding tickets, however, are not claimable under any circumstance.
Hotel Accommodation
Overnight stays required for business are allowable, provided the travel is essential. Accommodation should be reasonable in cost and proximity to the business location.
Claimable hotel expenses include:
- Nightly room rates
- Wi-Fi charges
- Booking fees
Luxury extras like mini-bars, spa treatments, or movies are not deductible.
Meals During Travel
Subsistence costs are allowable when incurred during overnight stays or long business journeys. These include:
- Breakfast
- Lunch
- Dinner
- Non-alcoholic beverages
Meals during a normal working day at your home office are not claimable. For meals to qualify, the journey must involve travel away from your normal place of work and not be a regular, recurring route.
Mixed-Purpose Travel
If a trip is part business and part personal, only the business portion can be claimed. You must clearly divide the costs. For instance:
- If attending a conference and extending the trip for holiday, claim only the hotel nights and transport directly related to the event.
- If flying for business and booking a return a few days later for leisure, claim only the outbound leg if no meetings occurred after the event.
Any claim mixing personal and business reasons needs detailed logs, receipts, and explanations to withstand potential HMRC review.
Keeping Records for Travel and Subsistence
Accurate documentation is essential for all travel-related claims. In the event of a tax audit, HMRC will require evidence showing the necessity, purpose, and cost of each expense.
Mileage Logs
Maintain a detailed record for every journey:
- Date of journey
- Start and end locations
- Purpose of the trip
- Total miles driven
- Rate applied
Many self-employed professionals use mobile apps or spreadsheets to keep this data up-to-date.
Receipts and Invoices
Keep copies of:
- Transport tickets
- Hotel invoices
- Meal receipts
- Ride-hailing app summaries
- Toll and parking stubs
Digital copies are acceptable but must be legible and retrievable during tax filing or inquiry.
Travel Diaries or Itineraries
A simple diary outlining your business appointments, meetings, or event schedules can add credibility to your claims and help link expenses to business objectives.
Making Claims in Your Tax Return
Travel and subsistence expenses are recorded under the self-employment section of your Self Assessment return. You can either list these as individual line items or combine them into a single category of business travel expenses.
You are not required to send supporting documents when filing your return, but you must retain them for at least five years after the 31 January submission deadline.
Using Accounting Software
Most accounting tools offer dedicated fields or categories for business travel. These make it easier to distinguish between travel, subsistence, and other operational expenses.
Avoiding Common Mistakes
- Don’t claim for commuting between your home and regular work site
- Avoid rounding mileage without logs
- Ensure hotel stays are clearly tied to business activity
- Don’t include personal travel costs
Being overly generous or vague with travel claims is a common red flag. If unsure, consult with a tax advisor.
When to Use Flat Rates or Actual Costs
You may choose to use actual costs (receipts) or flat rate mileage for travel, depending on your situation.
Flat Rate Mileage Pros
- Simple to apply
- No need for fuel or repair receipts
- Covers most vehicle-related expenses
Actual Cost Method Pros
- More accurate for expensive or high-mileage vehicles
- Covers lease payments, insurance, fuel, and servicing
You must stick to the chosen method for the entire year and cannot mix them. Choose the method that maximizes your allowable claim while maintaining simplicity and compliance.
Other Related Allowable Travel Expenses
Vehicle Insurance and Maintenance
If you use actual costs instead of mileage rates, you may claim:
- Business portion of insurance
- Fuel expenses
- Servicing and repairs
- Vehicle depreciation
Only the business portion can be claimed, based on mileage or logbook records.
Hire Cars and Business Rentals
If you hire a vehicle specifically for a business trip, the rental fees and associated insurance can be claimed. Retain the rental agreement and usage justification for reference.
Equipment Transportation
If your travel includes transporting tools, laptops, promotional material, or goods, this strengthens your case for the journey’s business purpose. It also justifies the choice of transport, particularly if bulk or weight necessitates a larger vehicle or taxi.
Special Cases
Tradespeople and Mobile Workers
Those who visit multiple sites daily—like plumbers, electricians, or surveyors—can usually claim mileage for travel between job sites. However, travel from home to a regular client or fixed location may be deemed commuting unless each location varies frequently.
Attending Conferences or Seminars
Travel to professional development events or networking functions is allowable, provided the event directly relates to your business.
Temporary Work Locations
Journeys to temporary places of work—less than 24 months or not part of your normal routine—are often accepted as business travel. Documentation showing the temporary nature of the work is essential.
Organising and Tracking Your Work-from-Home Business Expenses
Keeping accurate and timely records of expenses is essential for anyone running a business from home. Beyond simply preparing for the Self Assessment tax return, good record-keeping can improve financial decision-making, reveal opportunities for savings, and help ensure compliance with HMRC regulations.
We will explore the practicalities of managing and tracking your work-from-home expenses, how to structure your records, the benefits of digital systems, and common challenges that self-employed individuals may encounter.
Why Organising Your Expenses Matters
Accurate expense tracking enables:
- Precise profit calculation
- Easier tax reporting
- Justified claims for deductions
- Faster responses to HMRC inquiries
- Avoidance of over- or underpayment of tax
Without a well-maintained system, business owners may miss legitimate expenses, misclassify personal and business costs, or lose track of claimable items over time.
Setting Up a Record-Keeping System
A good system doesn’t need to be complex, but it must be consistent. Choose a method that aligns with the scale of your operations and your comfort with technology.
Paper-Based Records
Some still prefer maintaining printed receipts and handwritten logs. If going this route, ensure you:
- Use folders divided by expense type (utilities, travel, office supplies, etc.)
- Store physical receipts in order of date or type
- Maintain a ledger or notebook to log each expense
This method is time-consuming and vulnerable to damage or loss, but it’s straightforward for those with limited digital access.
Spreadsheet Tracking
A simple spreadsheet can provide structure and flexibility. You can create columns for:
- Date
- Vendor or service provider
- Expense category
- Description
- Amount (with VAT noted separately if applicable)
Use tabs for different months or expense types, and colour-code categories for visibility. Regular backups are essential.
Digital Accounting Tools
Cloud-based platforms streamline the process of entering, categorising, and storing expense data. Many offer features like:
- Receipt scanning via smartphone
- Automatic bank feeds
- Categorisation rules for recurring transactions
- Real-time profit/loss tracking
- Tax calculation tools
Choosing a tool with Self Assessment compatibility helps avoid last-minute stress.
Categorising Home-Based Business Expenses
Your expenses should be separated into relevant categories for ease of reporting. Common categories include:
- Office supplies
- Utility bills (apportioned for work use)
- Internet and phone
- Rent or mortgage interest (apportioned)
- Business travel and subsistence
- Equipment and depreciation
- Insurance (e.g., professional indemnity)
Correct categorisation prevents misclaims and improves the accuracy of your tax return.
Direct vs Indirect Expenses
Understand the difference between direct and indirect expenses:
- Direct expenses relate entirely to business use, like advertising or stationery
- Indirect expenses are shared, like electricity or the internet. These need to be apportioned
Accurate allocation helps demonstrate reasonable expense claims during a review.
Storing Receipts and Invoices
You are legally required to retain evidence of all business transactions. HMRC expects self-employed individuals to keep records for at least five years after the 31 January submission deadline of the relevant tax year.
Accepted formats include:
- Paper receipts
- Scanned documents
- Digital photos (as long as they’re clear and legible)
- Invoices and bank statements
Apps and cloud storage provide easy ways to store and search digital records. Be sure the system you use allows quick retrieval in case of a tax review.
Automating Your Record-Keeping
Automation reduces the risk of errors and saves time. Consider automating:
- Bank feeds that pull transactions directly into your accounting tool
- Categorisation based on vendor or payment type
- Monthly recurring expenses like subscriptions
- Reminders for expense logging and receipt uploads
Automation can help ensure expenses are logged as they occur rather than being saved for tax season.
Reconciling Bank Accounts
Bank reconciliation is the process of ensuring your records match your actual bank statements. This should be done monthly to:
- Identify missing or duplicate entries
- Catch unauthorised or personal transactions
- Detect incorrect categorisation
Many accounting platforms support automatic reconciliation. Manual checks are also effective but require discipline and consistency.
Handling Mixed-Use Expenses
Home-based businesses often involve mixed-use assets—items and services used for both personal and business purposes. These must be carefully apportioned.
Examples include:
- Mobile phones used for both personal and client calls
- Internet service shared with household members
- Heating and lighting for a room occasionally used for work
Use reasonable methods to divide these costs, such as percentage of use, time spent working, or number of people sharing the service.
Dealing with Cash Payments
While card and bank transactions are easier to track, some self-employed workers still receive or pay with cash. These must be properly logged.
Maintain a cash book to record:
- Date of transaction
- Payer/payee
- Amount received or paid
- Description of the item/service
Always issue or collect receipts when dealing with cash to substantiate the record.
Staying Compliant with HMRC Requirements
The UK tax authority requires clear, comprehensive, and accurate records. If your books are disorganised or incomplete, you could face penalties.
Compliance includes:
- Logging all income and business expenses
- Keeping evidence of each transaction
- Using correct apportionment methods for shared costs
- Retaining records for the required duration
HMRC’s Making Tax Digital initiative is gradually changing the way records are kept. Staying informed of current requirements ensures long-term compliance.
Preparing for Self Assessment
Well-organised records make Self Assessment filing quicker and less stressful. Before completing your return:
- Review each expense for legitimacy and accuracy
- Ensure all receipts are available and readable
- Total expenses by category for the tax year
Digital tools often allow direct export or integration with HMRC’s online filing system. Otherwise, your data can be used to fill out the self-employment section manually.
Avoiding Common Expense Tracking Mistakes
Errors in expense management can lead to:
- Missed deductions
- Overclaimed expenses
- Penalties from HMRC
Some of the most common mistakes include:
- Failing to separate business and personal costs
- Not recording small, frequent purchases
- Misclassifying expenses
- Disorganised record storage
- Waiting until the end of the year to track expenses
Addressing these issues early helps maintain accurate, defensible records.
Using Budgeting to Support Expense Management
A clear view of your expenses supports better business planning. Create a simple budget that:
- Estimates regular monthly expenses
- Allocates funds for equipment and emergency costs
- Accounts for tax savings and business growth
Comparing actual expenses to budgeted amounts helps identify cost-saving opportunities.
Getting Professional Help
If managing expenses becomes overwhelming, consider hiring a bookkeeper or accountant. They can:
- Categorise and reconcile expenses
- Assist with complex claims
- Ensure compliance with evolving HMRC rules
Professional advice is particularly helpful when your expenses grow more complex or your business expands.
Choosing the Right Tools and Apps
There are various expense management apps tailored for self-employed professionals. Features to look for include:
- Receipt scanning via mobile
- Integration with your bank
- Real-time reporting
- HMRC-compatible reports
Tools that automate repetitive tasks can significantly reduce the administrative burden of running a home-based business.
Conclusion
Working from home as a self-employed professional offers flexibility, autonomy, and cost-saving opportunities, but it also comes with responsibilities. One of the most crucial is understanding how to claim allowable expenses, maintain accurate records, and ensure compliance with HMRC guidelines. Across this series, we’ve explored the various types of expenses you can claim, including utilities, rent or mortgage interest, simplified and actual cost methods, travel, and much more.
By using clear and fair methods to apportion your expenses, whether by room usage or hours worked, you can reduce your taxable income legally and effectively. It’s also important to weigh the benefits of using the flat rate method versus itemising your actual costs, depending on the complexity of your business and the amount of time you spend working from home.
Managing your expenses isn’t just about tax returns, it’s a fundamental part of running a sustainable business. Adopting a robust record-keeping system, whether paper-based, spreadsheet-driven, or digital, allows for better budgeting, faster filing, and reduced risk of error. Tracking receipts, categorising expenses correctly, and automating repetitive tasks can save time and provide peace of mind during tax season.
Don’t overlook indirect and mixed-use expenses, which can be partially claimed when allocated appropriately. Avoid common mistakes such as missing receipts, forgetting small claims, or confusing personal and business costs. Establish routines for tracking and reconciling accounts regularly, and be proactive in adjusting your methods as your business evolves.
Finally, whether you’re just starting or already established, it’s worth reassessing your expense management practices annually. Use budgeting tools, digital apps, or even professional support to ensure you’re not only compliant but also maximising your allowable deductions. With the right approach, claiming work-from-home expenses can be straightforward, transparent, and financially rewarding.