Using Your Home For Business

Many startups will use an area in the family home for business purposes.  You do not need to set aside a specific area for business, but if you do you can claim that proportion of home expenses as a business deduction.

Home Areas to Claim

For example if you sometimes operate at the kitchen table or breakfast bar, you'll want to use a reasonable apportionment of expenses based on the time the area is used, and the size of the area in comparison to the size of the home.

Other areas of the home might include an office, storage space, workshop or garage for storing the company car.

Record Keeping

You'll want to keep full record of expenses you want to claim, the same as for expenses incurred on the business account.

Expenses that can be included in your home office claim include rent, mortgage interest, rates, home insurance, power, repairs & maintenance.  Be careful to differentiate principal and interest when claiming mortgage expenses.

Telephone, Internet and Mobile

Telephone and Internet costs will often be paid together but will attract different treatment for home office claims.  While telephone rental will be 50% deductible for the business, any tolls will be 100% deductible, and you'll need to apply a reasonable apportionment to internet expenses as these are usually considered private.

Mobile expenses will be 100% deductible so long as any private use is incidental.  If you have a private mobile that is used occasionally for business you might leave this out of your home office claim.


Should you have any queries please get in touch

Disclaimer: Information provided to the best of the authors knowledge at time of publication.  Laws are subject to change and independent advice should be sought.  The above information is general in nature and should not be construed or relied on as a recommendation.