Are you a self-employed individual preparing your tax return to file by 31st January? And do you carry out this work from your home?

If the answer to both of the above questions is yes, you are entitled to include part of the running costs of your home in your accounts, which will save you some tax.

But how do you work out what you can claim for, and how much?

Well, that depends on the type of business you have and what you can actually do at home. For example, if you're a jobbing gardener, you might spend an hour or two a week writing up your books at home, but then spend the rest of your working life at your customers' premises. However, if you're a web designer, you may well do 90% of your work at home and only occasionally visit clients.

HM Revenue say that you need to apportion the running costs of your home on a "fair and reasonable" basis between the private element of that cost - the part that relates to your actually living there - and the business element.

It's not a good idea to use any part of your home solely for business activities however, because capital gains tax will then be due on this part of your home should you ever sell your property.

An easy way around this is to make sure that you use your home office for business only part of the time - for instance, if you're musical, you could combine it with a music room with instruments and recording equipment. This way, it would be easy to prove to a visiting HM Revenue inspector that it's used for more than one purpose.

For argument's sake, say you had ten rooms in your house, one of which was the aforementioned music room/office. You'd only use one room for business, whereby 90% of the time spent in that room would be related to business. To work out your accounts figure for the business-use of your home from there, you'd have to add up all of the costs you can claim, then multiply that by 1/10 and then by 90% to get the proper figure.

But what running costs can you actually include in your accounts?

While you can't charge your business rent when you're self-employed, if you're renting your home from a landlord, you can claim a proportion of the rent for your business.

Similarly, if you're buying your home through a mortgage, you can claim a proportion of the interest only, not the capital repayment. You can also claim a proportion of your council tax cost; however, depending on how much you use your home for business, you might have to pay business rates rather than council tax.

You can also claim the full cost of the business-use of your telephone line, and you could apply to your water company if your home water supply is used a lot for business - for instance, if you run a car valeting service.

Finally, with regards to repairs, if your repair relates solely to the part of the property that's used for business, you would include this cost in your accounts in full, subject to the business-use of that room.

However, if the repair is just for a part of the house that's not used for business, such as the re-plastering of a bedroom, then you couldn't claim any part of that repair in your business accounts.

If you're struggling to turn around your self-assessment form from a home business standpoint, then either seek legal advice or take advantage of some of the free accounting software that's available. It's important not make any errors of judgment with regards to your tax form, so make sure everything on there is above board.

The author of this article is a part of a digital blogging team who work with brands like Free Agent. The content contained in this article is for information purposes only and should not be used to make any financial decisions.