This extends the deduction allowable in section 94H of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005) in respect of the use of a person’s home for the purposes of a trade to cases where the trade is carried out by a partnership.
- Although fixed rate deductions for use of home were first introduced for the year 2013/14 onwards, the amendment for partnerships has not been backdated and is only effective for 2016/17 onwards.
- It would appear that clause 24 is actually restricting the claim that can be made for use of home by an individual compared to what is in existing section 94H. New section 94H (4B) states that “where more than one person does qualifying work in the same home at the same time, any hour spent wholly and exclusively on that work is to be taken into account only once…”. There was no similar restriction in existing section 94H which defined ‘number of hours worked’ as “the number of hours spent wholly and exclusively on work done by the person, or any employee of the person, in the person’s home wholly and exclusively for the purposes of the trade”, so it could have included hours worked by more than one person at the same time. It is not necessarily logical to restrict a claim to one person only – they could be working in different rooms for one thing. The use of home fixed deductions are paltry anyway so a restriction is not likely to make much difference (there is the option to claim actual costs), but fixed rate deductions offer helpful simplicity especially with digital reporting on the horizon so HMRC surely ought to be encouraging them by making them more attractive?