BIM66215 - Subcontractors: expenses: use of home

Must set aside a definite part or proportion for business purposes

A deduction in respect of the business use of the subcontractor's home depends on the nature and the extent of any business activity being carried on there - see ( BIM37665). If significant business activity is carried out in the home, a deduction will normally be due.

But such a deduction is only due where the subcontractor can show that a definite part or proportion of their home is being used for business purposes. BIM37600 provides guidance on how expenditure should be apportioned in these circumstances. Following the decision in Prior v Saunders (66TC210), a subcontractor cannot obtain a deduction for their own living costs by reclassifying expenditure on personal accommodation (no part of which is set aside exclusively for business use) as ‘use of home as office’ - see BIM37665.