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Working from Home - claiming expenses

jackieshepjackieshep Feels At HomeRegistered Posts: 68
I am working for a company whereby one of the directors works from home.

Can anybody help with with regards to the following:

1. what can they claim for working from home re expenses?
2. what can they claim for phone/mobile phone/internet from home?

Many thanks
Jackie

Comments

  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,441
    They can claim a proportion of the expenses relating to operating the business from home on a proportional basis. HMRC actually have some clear guidance here http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm

    As for mobile and home phone these are limited to the cost of the calls only unless the contracts are in the company name where there is no BIK on the private calls. iPhones and Blackberries are not phones in HMRC's eyes and are to be treated as computers. i.e. 20% of phone and contract cost is a BIK. As for home internet I believe this is only for dial up but I'm not sure?
    Regards,

    Burg
  • andrewtdkandrewtdk Well-Known Registered Posts: 150
    Out of curiosity do you know exactly how the BIK works for blackberrys etc?

    Is it just 20% of the total contract cost for the year or is it pro rata based on personal and business use as with normal computers? I presume this can get a bit complicated when it comes to deciding a personal use percentage and also as to what is classed as a computer or PDA as there are many different phones similar to blackberrys and iphones which may be caught out aswell
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    For limited companies, charging rent for use of the directors home is more flexible. A proportion of any associated costs can then be claimed as a deduction on the directors own tax return.
  • jackieshepjackieshep Feels At Home Registered Posts: 68
    For limited companies, charging rent for use of the directors home is more flexible. A proportion of any associated costs can then be claimed as a deduction on the directors own tax return.
    Is it something that needs to be discussed at year end when the directors tax return is done, which will probably be at the same time as the accounts are audited, or should expenses be allocated as the year progresses, as in my case the director works for a limited company.
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    The allocation does not have to be done in advance but it is advisable to get the director to sign a simple Home Office Agreement to document that rent will be charged to the company for use of the directors premises during the year.

    If you make it a 'serviced office' e.g. including telephone, internet etc. then you can bypass the wholly, exclusively and necessarily rules that apply to remibursed expenses for employees and instead use the more favourable wholly and exclusively only rules for a rental business.
  • jackieshepjackieshep Feels At Home Registered Posts: 68
    Thanks for your help Dean

    Jackie
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    andrewtdk wrote: »
    Out of curiosity do you know exactly how the BIK works for blackberrys etc?

    Last time I looked this up, even though a BB is classed as a computer and not a phone, if having a BB was a necessity of the business (i.e. you have a job with the company therefore you have to have a BB) then any private use of it is incidental and is not a BIK.

    I can't remember where I read this, would have been one of the HMRC manuals, but I distinctly remember it as we have BBs and it's essential for work and we don't record them as a BIK for that reason.
  • wildgoose1ukwildgoose1uk Well-Known Registered Posts: 200
    If it is a mobile phone then there is no BIK as long as the contract is in the firm's name;
    If it is a computer and wholly exclusively for work then there is no BIK

    Hands up all those who sit in from of the TV every evening surfing the web on their BB?

    My wife's firm throws Iphones at al the senior staff and there have been no issues either with the auditors or HMRC.
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