Can I Claim Use of Home (Sole Trader) as a Business Expense in Ireland?
Partially, Irish sole traders working from home can claim a reasonable proportion of household running costs (light, heat, broadband, mortgage interest, insurance) based on the area used and time spent on business.
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What Revenue (Revenue Commissioners) says
Revenue accepts a 'reasonable apportionment' for sole traders using their home as a place of business. The basis should be defensible: e.g. one room out of six used 80% of the time = (1/6) × 0.8 = 13.3% of variable household costs. A sole trader may also claim the business share of heat, light, cleaning and insurance. Mortgage interest and rent follow the same reasonable apportionment, but the capital repayment part is never deductible. The same working must be repeated each year as bills and time change.
When you can claim
- Apportioned light and heat
- Apportioned broadband
- Apportioned mortgage interest (sole trader only, not for employee directors)
- Apportioned home insurance
- Business share of cleaning and repairs to the room used for work
- Business share of the cost of an alarm and a phone line at the home office
When you cannot claim
- Capital costs of the home itself
- Mortgage capital repayments
- Rooms used 100% for business may trigger partial CGT loss of PPR relief on sale
- Property tax (LPT)
- The cost of redecorating or extending the whole house, which is private
- Food, clothing and ordinary household shopping, which are private
Good to know
Pro tip: Work the percentage out once a year and keep the calculation with the bills. Use floor area of the work space over total floor area, then the share of time. A reasonable and consistent method is what an inspector looks for.
Important: Using a room exclusively for business can affect Principal Private Residence relief on sale of the home for CGT. Mixed-use is generally safer. If part of the home is used exclusively for the trade, a gain on selling the home may lose some of its relief from Capital Gains Tax on that part. Occasional use does not have this effect, so it is safer to keep the room in mixed use.
Related expenses
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