Simplified expenses if you're self-employed

Living at your business premises

A small number of businesses use their business premises as their home, eg a guesthouse, bed and breakfast or small care home.

You can use simplified expenses instead of working out the split between what you spend for your private and business use of the premises.

With simplified expenses you calculate the total expenses for the premises.

Then use the flat rates to subtract an amount for your personal use of the premises, based on the number of people living on the premises and claim the rest as your business expenses.

Number of people Flat rate per month
1 £350
2 £500
3+ £650

Example

You and your partner run a bed and breakfast and live there the entire year. Your overall business premises expenses are £15,000.

Calculation:

Flat rate: 12 months x £500 per month = £6,000

You can claim:
£15,000 - £6,000 = £9,000

If someone lives at your business premises for part of the year, you can deduct only the relevant flat rate for the months they live there.

Example

You and your partner run a bed and breakfast and live there the entire year. Your child is at university for 9 months a year but comes back to live at home for 3 months in the summer.

Calculation:

Flat rate: 9 months x £500 per month = £4,500
Flat rate: 3 months x £650 per month = £1,950
Total = £6,450

You can claim:
£15,000 - £6,450 = £8,550

Use the simplified expenses checker to compare what you can claim using simplified expenses with what you can claim by working out the actual costs.