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Hi,
Yes thats the way i understand it too. I have read that you need to exclude the kitchen and bathroom as rooms though. So he could claim approximately one sixth of the cost of bills such as rent to landlord, council tax i believe, gas, electricity, house insurance if he doesnt have separate business insurance. I have read you cant use water rates but others do. I would check out the HMRC web site as they have a section devoted to this subject and give examples too which are useful. You can also claim a portion of the house repair costs but as he rents this might not apply and decorating costs. There is another way to do it and that is by floor area of the property. You must bare in mind though and this is where it gets tricky, that it is also the length of time spent doing his work in the room. Does he use it for 4 hours a day or 10 and how many days a week? It could be argued that as it is set up as an office it is set up 24 hours a day in which case he could claim the full one sixth. Capital gains tax may come into it if it is classed as 100% use, some keep a tv in to get around this and watch it an hour in the evenings! There is an allowance of i think £4 per week that HMRC allow employees to claim without any proof of expenses, but this is for employees not sole traders etc. Check HMRC site though for correct information.
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