Tax law says that an expense is only allowable as a deduction if
it is incurred ‘wholly and exclusively for the purposes of
the trade’ (ITTOIA/S34 (1)). If an expense is incurred for
more than one purpose, this section does not prohibit a deduction
for any identifiable part or identifiable proportion of the expense
which is incurred wholly and exclusively for the purposes of the
trade (ITTOIA/S34 (2)).
This page explains what is meant by part of the home being used ’wholly and exclusively‘ for business purposes. If you need a more detailed review of the meaning of wholly and exclusively see BIM37000 onwards.
Wholly and exclusively does not mean that:
Wholly and exclusively
does mean that when part of the home is being used
for the business then that is the sole use for that part at that
time. Thus if the part of the home used for business purposes is
also, at the same time, used for some other non-business purpose,
no deduction is due.
The question is whether there are periods when part of the home is being used solelyfor business purposes. If part of the self-employed person’s home is set aside solely for business use for a period, they can claim as a deduction the costs they incurred on that part during that period. It will be most unlikely that they have a separate bill for that specific part and usually this exercise will involve apportioning the total relevant bill between the period of solely business use and the remainder of the time covered by the expense.