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Posted Mon, 19 Jun 2023 12:13:44 GMT by scdwb
Hello, I've been working from home as a web developer for 14 years and although have always pondered renting an office could never justify the cost when considering what I could get and including additional car parking and travelling expenses. Typical office environments are also less appealing to me than my home office. But separation between home and work life has become increasingly important in recent years. An opportunity has come up recently locally where there is a static caravan on a site with a holiday licence. It is only 10 minutes from my home, has free parking and is in a tranquil setting. Site fees are around £4k per year. Site rules state it is private use only, we are not allowed to rent the caravan out. Therefore, there are no other considerations, such as me operating it additionally as a rental. After some accountancy advice I believe it's possible to offset some costs on a proportionate basis. However, genuinely my proportion would be split 70/30 (working 5 days per week there and potentially 2 used as pleasure on the weekend, although not every weekend). Understandably, I'm told: "70% is likely to be considered excessive for a site that can be used for both business and personal. A Caravan by its nature goes to suggest that personal use is the primary intention and business is secondary. Therefore to allocate a higher % to business use may be objected by HMRC as being incorrect. If you can satisfy the HMRC on its objection then you may use the 70% as you proposed." This makes a lot of sense, although my motivations are genuine and if HMRC objects I would make the following points in my response: 1. My nature of work does not require typical business premises as I'm working from a computer. 2. The static caravan, which is minutes from my home it not a holiday destination for me. 3. It is ironically cheaper then renting office elsewhere. Private offices half an hour from me is nearer £6k annually, Over £8k closer to the city. The only cheaper option I can find is hot desking, which is £2k in the city. I have no intention of commuting to the city. Costs of travel and parking mean it's likely not to be cheaper anyhow. 4. Above all else, it's simply a beautiful setting. I understand there is no law which states I must commute into a town, be in a purpose built office block and look out to roads and view cars and hear traffic noise during my working hours. This site is 10 minutes away in a forest setting looking out to trees, animals and nature. So I'd like to choose to work there if given the opportunity and the fact it's cheaper is an additional bonus. 5. Because it is a pleasurable place I would also use it up to 30% of the time for pleasure. This is limited being only 10 minutes away from my home, there is less incentive to sleep and stay there for long periods. But random weekends are likely. In practice it's likely to be even less than 30%, but I'd plan to commit to the 30% for the purposes of expenses. I'm wondering if I could get any confirmation from HMRC before hand and if my reasons are accepted can I get this in writing so I have it for the future should any future objection from HMRC be raised? Thank you
Posted Thu, 22 Jun 2023 14:30:01 GMT by HMRC Admin 32

You will need to apply for this in writing as a definitve answer cannot be given on this forum.

Income Tax: general enquiries

You would need to detail your current expenses for working from home and then give details of the caravan for number of bedrooms etc and any other costs that may be incurred over and above the site fees.

Thank you.

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