Double Entry posting for room used as an office

mgrant Registered Posts: 7 Regular contributor ⭐ ? ⭐
My client uses a room as an office, at present I have it posted in the trial balance as an expense under Room used as an office, and the double entry is posted to Directors Current account. Is this OK or should it be posted separately in the balance sheet? I have seen this posted separate before in practice but not sure where this is suppose to be posted.

Advice would be gratefully accepted asap as I have to submit to Companies House later this week.


  • Laura8192
    Laura8192 Registered Posts: 95 ? ? ?
    That is how I would do it, debit expense, credit Directors Loan account.

    Someone more experienced than me feel free to correct me though :-)

  • CeeJaySix
    CeeJaySix Registered Posts: 645
    Yep, that's all we do with it for the £3/week claims.
  • Laura8192
    Laura8192 Registered Posts: 95 ? ? ?
    Good point CeeJay, as they are Directors they can only claim £3 a week (£4 a week from 2012/13) they cannot claim a proportion of household bills.

    If they want to claim more than the £3/£4 rate, they have to officially rent the room to the Ltd Co, then it gets tricky as that is then personal income, so I think you'd need to find the balancing point where the income is totally offset by allowable expenses. Good records would need to be kept to prove the allowable expenses. None of my clients currently do this though so I stand to be corrected if I got it wrong.
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