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The home office
Small and one-man companies commonly operate from the owner-director’s home office.
The company can reimburse additional accommodation expenses incurred free of tax and National Insurance under ITEPA 2003 s 316 using the HMRC agreed rate of £3 per week or at a higher rate supported by receipts.
The type of expenses that can be claimed are limited and there is no deduction for mortgage interest. Self-employed individuals working in similar circumstances appear to have more flexibility because an appropriate proportion of total home expenses may be claimed.
It has been suggested that the owner-director should have a rental agreement giving the company a non-exclusive licence to occupy the serviced office facility.
The owner-director declares the rental income in his personal tax return but is able to deduct the proportion of rental expenses producing break-even or rental profits.
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