Yes, coworking spaces are tax deductible if they are used primarily for business purposes, based on the total and exclusive principle. Limited liability companies can claim the costs of coworking spaces as a business expense. This reduces the company's taxable profit, which reduces its corporate tax liability. The money you spend to use a co-working space is tax deductible.
This means that you can claim the cost of a co-working space by returning any taxes you pay to HMRC. Do you work from a coworking space or a private office? You may be able to claim the costs of renting these spaces. This includes membership fees and any specific expenses related to your work activities. The key is to ensure that these expenses are directly related to your work. For more information, see the difference between a coworking space and a serviced office.
In the case of self-employed people, they cannot request tax relief on the cost of the structure itself or on any other cost directly related to the installation of the building and the office, including shipping costs if a ready-made office is purchased. The cost of the initial decoration also falls into this category. However, repairs are allowed, including redecoration costs. The cost of heating and lighting is tax deductible, as is the water supply if measured separately from the home.
It's generally acceptable to claim expenses when you regularly use the space for work activities, such as business meetings, specific work sessions, or attending networking events held in the coworking space. If you're a sole trader, you can claim the expenses of a co-working space in the “office costs” category if you use the space as your full-time office. When you pay for a coworking space membership, you no longer have to pay the utility bills that you would otherwise have to pay if you rented a traditional office space. 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.
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 per use. Regardless of the business structure, claiming the expenses of coworking space requires 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.
