Home Office and Vehicle Expenses

📐 Home Office Methods

The Floor Area Method

Measure the area used regularly for the business as a percentage of the total floor area of your home. Apply that percentage to your household running costs.

The Square Metre Rate Option

Inland Revenue publishes a square metre rate that lets you claim a set amount per square metre of business space for the utility-type costs, on top of a separate claim for the premises costs like rates, insurance, and interest based on your business-use percentage. This can be simpler than tracking every utility bill.

Keep It Reasonable and Recorded

The space should be genuinely used for the business. Keep a note of the measurements and the bills you are apportioning, so the claim stands up if questioned.

🚗 Vehicle Expenses

Two Main Methods

If you use your own vehicle for work, you choose between keeping a logbook to find your actual business-use percentage, or using the kilometre rate for your business travel.

The Logbook Method

You keep a logbook for a representative period to establish what percentage of your driving is for business. That percentage is then applied to your real vehicle costs, such as fuel, servicing, registration, insurance, and depreciation, until it needs refreshing.

The Kilometre Rate Method

Instead of tracking every cost, you record your business kilometres and multiply by the published rate, which is designed to cover running costs. It is simpler but you still need a record of business travel.

💡 Records and Common Mistakes

Records You Need

• Home office: measurements and the bills you apportion
• Vehicle: a logbook or a record of business kilometres
• Receipts and invoices for the costs claimed
• A clear, consistent basis for the business-use percentage

Common Mistakes

Mistake 1: Claiming the Whole Bill

You can only claim the business portion of mixed costs, not the full household or vehicle expense.

Mistake 2: No Records

Without measurements, a logbook, or receipts, claims can be denied on review. Records make the claim real.

Mistake 3: Letting the Logbook Go Stale

A logbook percentage is valid for a period and then needs refreshing if your travel pattern changes.

Mistake 4: Mixing Methods Carelessly

Pick a consistent method for the vehicle and apply it properly, rather than switching in ways that do not stack up.

A Simple Approach

See our Self-Employed Tax material for the wider picture. Final word: home office and vehicle claims come down to working out a fair business-use share and backing it with records. Use the floor area or square metre rate for home, and the logbook or kilometre rate for the vehicle, and only claim the business portion. This is general information, not tax advice; the published rates change, so confirm the current figures.