Excessive Claim?

T.C. Registered, Tutor Posts: 1,448
I have a new client with a small business with a turnover of just £20K and a very small profit. Her previous "book-keeper", who has now vanished, put in a claim for home expenses of: water 17%, council tax 17% and Elec/Gas 17%. For a small business this means that last year she claimed over £500 in use of home expenses. Although she does work from home making up gift items, I wouldn't normally put in this much. Any views?


  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    £500 doesn't seem exessive on the face of it.

    I always use the apportionment calculation:

    number of rooms x days a week x weeks a year x total costs.

    so if someone only has a 1 or 2 bed house/ flat with 1 reception room, that can bump the costs up considerably vs someone with a 3-bed-2-recep house.

    The amount doesn't have to be proportional to turnover - it needs to accurately reflect the amount the house is used. A lot of people work 6-7 days a week for long hours and so this would push the UOH calculation up.

    If someone is only using their house for a few hours a week to do their admin, then they may as well claim the statutory £3 a week as that may well be more generous!
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    Thanks for your opinion. I will check it out.
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