Use of residence as office

Dsindle

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

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.

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

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

Thanks,

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.