With the start of a new financial year it is timely to explore how to correctly claiming your home office expenses.

Can I claim home office expenses?

Yes you can if:-

• You are undertaking genuine employment related activities, or
• Home is your sole base of operations (which includes employees who are not provided with an office, or
• You are carrying on a business from home.

What can home office expenses can I claim?

You can claiming running costs such as:-

• Heat, light and power
• Phone expenses
• Internet
• Consumables such as computer supplies and printing & stationery items

Those who run a business from home or it is their sole base of operations can also claim occupancy costs.

How can I quantify my claim?

There are two available methods:-

1. Fixed rate method
2. Actual expenses

How does the fixed rate method work?

Under this method, one claims 67 cents for every hour worked at home.  Occasionally checking emails doesn’t is not sufficient to allow a claim.

To qualify to sue this method you must incur at least one of the following expenses:-

• Electricity or gas for heating and/or cooling or to power equipment.
• Internet
• Mobile or home phone
• Printing and stationery.

Receipts must be kept to evidence one or more of these costs have been incurred.

And additional to this claim is the depreciation of any home office work items.

TRAP Irrespective of how much you may genuinely use your mobile away from your home office, you will not be able to make a separate claim for using that mobile.

TIP     You don’t need to have a set aside office only used for work purposes.  You just need a dedicated area.

TIP     Once can also claim for hours worked at a holiday home (provided above criteria satisfied).

What records do I need to keep under the cents per hour method?

In addition to the receipts above, as we have highlighted in past posts and Tax Return covering letters, you have been required since February 2023 to log every hour worked at home.

TIP    As stated above, you can only claim hours you have logged.  You can download a spreadsheet below that is set to track very hour worked at home.

TIP     We recommend downloading the spreadsheet below and saving it in the middle of your desktop or laptop – that way you won’t forget to log the hours as you work them.

You can download the home office cents per hour method by clicking here – 2024-25-Home-Office-Expenses-hours-worked-log

What is included within an occupancy home office expenses claim?

One first measures and calculates the area that is used for work/business purposes.

The work/business area % is then applied to:-

• Heat, light and power costs.
• Rent paid
• Mortgage interest
• Council & water rates
• Insurance

However, the area that is claimed under this method means that the Capital Gains tax Principal Residence is lost on the claimed area for the years claimed.

Please call us if you wish to discuss your claim in greater details.