Sole traders can claim coworking space expenses directly on their self-assessment tax return as business expenses. This reduces your taxable income, which could lower your income tax bill. The money you spend using a co-working space is tax-deductible. This means that you can claim the cost of a co-working space by deducting the taxes you pay to HMRC.
Even occasional use of coworking spaces can qualify for tax relief, as long as you keep adequate documentation of your expenses. So can you cancel a coworking space? The answer is a resounding yes, with some conditions. As long as you use the space for your business and keep meticulous records, you're setting yourself up for a potential profit that will save you taxes. And while HMRC may not soon accompany you to a coffee break in a coworking space, it does recognize the value of these modern workspaces to the UK's army of freelancers and entrepreneurs.
If you're a sole trader, you can still claim the expenses for a co-working space in the “office costs” category if you use the space as your full-time office. The expense claim is usually acceptable when you regularly use the space to carry out work activities, such as business meetings, specific work sessions or attend networking events held in the coworking space. When you pay for a coworking space membership, you no longer have to pay the utility bills that you would have to pay if you had rented a traditional office space. Having a dedicated desk that you can call your own usually costs more than “shared desktops” options, while some co-working spaces offer the option of using the space only when you need it, paying for use.
Because they only use the co-working space from time to time, the independent worker could claim expenses for the cost of these train trips, as well as for the time spent in the co-working space. Regardless of the business structure, to claim the expenses of coworking space, it is necessary that the space be used primarily and demonstrably for work purposes. Another benefit of working from time to time from a co-working space is that you can claim the cost of the trip to the space as expense.
