Working from home

jilt

Can the small weekly allowance that a sole trader claims for working from home be claimed by a director of a limited company, and can a director also claim mileage if he hasn't up until now been paid through PAYE?

Sorry ithey're such a basic questions, it's not come up with my limited company clients before and want to get it right before sending the file off to the chartered accountant for review.

groundy

You can charge £2 per week maximum for use of home as office for a Limited company. The alternative is for the director to charge a rent based on the the percentage use of his/hers household expenses.

And yes a director can reclaim mileage even if there is no PAYE. The mileage claim is a claim to recover expenses incurred and is seperate to any PAYE matters.

jilt

groundy wrote: »

You can charge £2 per week maximum for use of home as office for a Limited company. The alternative is for the director to charge a rent based on the the percentage use of his/hers household expenses.

And yes a director can reclaim mileage even if there is no PAYE. The mileage claim is a claim to recover expenses incurred and is seperate to any PAYE matters.

Thanks groundy I wanted to be sure.

Monsoon

I concur with what Groundy said

Just to add that in the second case (claiming household expenses) the director would have to put rental income on self assessment tax return. Rent a Room Relief does not apply.

jilt

Thanks Monsoon, I had decided that the small use of home allowance most reflected the use value wise, and also would eliminate the need to include rental income on his personal return.

I just wasn't sure if the rules for sole traders applied to directors also.

Monsoon

jilt wrote: »

Thanks Monsoon, I had decided that the small use of home allowance most reflected the use value wise, and also would eliminate the need to include rental income on his personal return.

I just wasn't sure if the rules for sole traders applied to directors also.

No problem

Often very very different, always best to check!

Nilesh Mandvia

groundy wrote: »

You can charge £2 per week maximum ...

I thought £2.00 was for 2007/2008 tax year and from 2008/09 is £3.00 per week.

mc25

Nilesh you are right it used to be £2 per week new rate is £3.

Monsoon

mc25 wrote: »

Nilesh you are right it used to be £2 per week new rate is £3.

Yep, whoops, missed that one!

jilt

Yeah I had used the £3 rate. Thanks to you all for your imput.