Use of residence as office

Dsindle Registered Posts: 39 Regular contributor ⭐
Hi All

I am completing a friends year end and notice on their previous accounts, their accountant (Practice)has alowed them £600 use of residence expenditure. I have discussed this with a fellow MAAT'er and we both agree this seems a little excessive.

Any thoughts on this people??


  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
    If it can be justified it's fine.

    However as has been stated before you would expect to see a calculation and some kind of entry in the self assessment return.

    In practice though I have seen differing amounts for use of home with none of the above, not correct but seems to go unnoticed - until you have an inspection.

    We had a PAYE inspection on a limited company where they asked for proof of the use of residence calculation which we could provide there and then (our client was a management accountant and fastidious about these types of claims) which they accepted straight away.

    You may want to request the use of home calculation from the previous accountants.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
    Anything between £3 and £5 a week seems to be accepted without a problem. Beyond that I think you would need justification - any employees there or just the one sole proprietor?
  • jamesm96
    jamesm96 Registered Posts: 523
    I'd agree with all the above, particularly that a calculation will be needed to support anything other than a modest amount. But then, surely you'd always want to do the calculation? It'll invariably result in a bigger (and legitimate) claim for UoH and a smaller tax bill for the client = happier, loyal clients.
  • Dsindle
    Dsindle Registered Posts: 39 Regular contributor ⭐

    I would have thought that £3 to £5 a day was acceptable, as it is just one room inside the house, with just two directors running the company.

    I will attempt to ge the workings from the previous Accountants!

    Many Thanks for your thoughts.
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