Allowable Expenses for home office

Allowable Expenses for home office

Didn't find your answer?

I've read somewhere that a proportion council tax and water rates CANNOT be claimed as an allowable expense for a home office as these costs are fixed and would be incurred by the individual anyway.

I've also read that a proportion of mortgage interest CANNOT be claimed for a home office, as this is the cost of borrowing rather than a cost of running a business.

But then I’ve also read that a proportion for these can be claim for a home office.

Can someone please tell me what is correct?

By a home office I mean for a self employed person that only uses the office for paperwork, and carries out most of his work travelling to different sites. But the office is only used for this purpose and has no private use.

Replies (8)

Please login or register to join the discussion.

avatar
By young ronaldo
10th Jan 2012 14:56
Thanks (0)
avatar
By accountslady
10th Jan 2012 15:02

So a proportion of council

So a proportion of council tax, water rates and mortgage interest can be claimed with receipts and a reasonsable calculation?

Thanks (0)
By Steve Kesby
10th Jan 2012 15:22

HMRC think so

You're better of referring to HMRC guidance when it tells you you can do a thing.  That way if you get challenged by an HMRC officer you're able to refer them to their guidance.  Their guidance at BIM47820 says you can claim for these.

Thanks (0)
avatar
By Ding Dong
10th Jan 2012 15:17

HMRC say you can use them

http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm 

see eaxmple 2 - it specifically mentions these costs

Just seen Steve's post - he is far quicker off the mark than me - agree with him !!

Thanks (0)
avatar
By accountslady
10th Jan 2012 15:39

Thank you.

And am I right in that if a room in the house is used solely for the business, then this proportion of the house would be liable for CGT?

But if a room a not solely used for business purposes, and the actual costs were calculated using area and time (as apposed to £3 per day), then the proportion of the house would not be liable for GCT?

Thanks (0)
By Steve Kesby
10th Jan 2012 17:01

Yes

It takes exclusive use for business purposes to take that part of the gain out of the main residence exemption.

Thanks (0)
avatar
By taxhound
11th Jan 2012 06:48

it all depends

on whether the claimant is an employee or self-employed.  You have been reading the rules for two different scenarios, hence the confusion.

Thanks (0)
avatar
By DAS
25th Jan 2012 12:36

Reportable

Would the payment to a director for expenses incurred for working at home, heat, light, etc. be taxable and NIC-able and reported on P11d?

Thanks (0)