Use of home as office
Dawny
Registered Posts: 62 Regular contributor ⭐
I have a client who is the director of a small one man band limited company.
His registered address is at his home and one room is used exclusively for his business.
I have been putting through an adjustment for use of home on the accounts based on the apportionment of expenses such as power, but reading around this subject I'm now not so sure if this is correct.
Does anyone have any advice, would it be better for the company to rent the room from the director?
Thanks!
His registered address is at his home and one room is used exclusively for his business.
I have been putting through an adjustment for use of home on the accounts based on the apportionment of expenses such as power, but reading around this subject I'm now not so sure if this is correct.
Does anyone have any advice, would it be better for the company to rent the room from the director?
Thanks!
0
Comments
-
The company DOES rent the room from the director. You are just calculating it by reference to an apportionment of costs. Make sure it is declared as rental income on the director's tax return (and claim an apportionment of the associated costs). For a belt and braces approach, make sure there is a rental agreement between director and company AND to protect the director's CGT relief on his home make sure the use is NOT exclusively business.0
-
second what dean saidRegards,
Burg0 -
But if you were only apportioning the true cost incurred for the business, that is over and above what is incurred for the residential element then it does not need to be treated as rental income.
Marginal cost of gas and electric is very difficult to calculate in practice and is unlikely to amount to very much so it is usually well worth going down the rental route.0 -
Rent a room relief
Hi Jay
I don't think that would be allowable,
http://www.hmrc.gov.uk/manuals/pimmanual/PIM4002.htm0 -
deanshepherd wrote: »Marginal cost of gas and electric is very difficult to calculate in practice and is unlikely to amount to very much so it is usually well worth going down the rental route.
This route also gives flexibility regards to tax planning.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 156 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 92 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 274 Tax
- 136 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership