When directors or employees carry out work duties from home, limited companies can reimburse part of the household expenses incurred as a result of business use.

There are 2 main methods for reimbursing home-working expenses:

1. Flat Rate Method:
   HMRC allows a company to reimburse up to £6 per week (or £26 per month) without needing to provide receipts. This option is suitable when working from home is regular but limited, and simplifies record-keeping.
2. Actual Costs Method:
   A more accurate reimbursement can be made by calculating the business portion of home running costs, such as:

• Electricity and heating
• Water
• Internet and phone bills
• Home insurance

This method involves apportioning these expenses based on the area of the home used for work and the number of hours worked. For example, if one room in a five-room house is used for business 8 hours a day, five days a week, only a percentage of household bills would be claimable.

However, council tax, rent, or mortgage interest must be handled carefully and are only allowable if part of the property is clearly used for business. Evidence such as calculations and receipts must be kept for compliance.

For more information, visit: www.gov.uk/expenses-and-benefits-homeworking