Where a home is used partly for business purposes, the simplified expenses rules allow a flat rate deduction for household running costs listed. The deduction is based on the number of hours spent wholly and exclusively on core business activities in the home, and is only available if these hours exceed 25 per month.
Core business activities comprise:
• providing goods and/or services;
• maintaining business records;
• marketing and obtaining new business.
The flat rates are as follows:
Number of hours worked — Flat rate per month
25 or more — £10
51 or more — £18
101 or more — £26
Use of the flat rate deduction also does not prohibit a separate deduction for telephone and broadband/internet connection costs.
If you have more than one home, they are treated as a single home for the purposes of calculating hours worked.