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Home as office costs - new rules wef April 2013

Do the new home as office rules which apply from April 2013 apply to limited companies? I didn't think they did until I read the followiong statement from an online tax reference library to which I subscribe:-

"From 2013-14 unincorporated businesses can choose to make a flat rate deduction for use of home for business purposes instead of claiming deductions for actual expenditure incurred (ITTOIA 2005 S94H). These flat rate allowances have been introduced as part of a set of simpler rules for some business expenses under the banner of ‘simpler income tax for small businesses’.

If an incorporated business would be allowed to deduct expenditure in calculating the profits of its trade in respect of the use of home for business it can use the flat rate deduction (ITTOIA 2005 S94H(1) ans (2))."



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11th Mar 2014 11:32

I don't know many companies...

... that have their own homes to use for business purposes.

On a strict interpretation s 94H only applies to trades, professions and vocations, as s 272 hasn't been amended to apply it to property businesses.

An owner-manager can charge the company rent for the non-exclusive use of a home office though and can deduct its expenses incurred for the purpose, which I imagine HMRC will accept on a flat-rate basis.

Alternatively, the director can be reimbursed the additional costs of working from home tax and NIC-free, but will need to substantiate them if more than £4 per week is paid.

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