Income from rent charged to business

Income from rent charged to business

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Hi

I run my own ltd company from home and charge it some rent because of the space it uses.

Last year when it came to preparing my own personal self assessment I included the rent received the UK Property Section of my self assessment. The figure was entered in box 

20 Total rents and other income from property 
and
29 Other allowable property expenses
 
So it cancelled itself out.
 
My question is though how this will affect my own personal tax credits?
 
Let's say for example that the rent received over the year was £5000. Does this mean that my £10000 personal tax credit is reduced by £5000 even though on the self assessment it was also included in box 29?
 
My second question is whether I also need to include things such as water, electricity in the figures? My feeling about this is yes because the exact wording of the box is
 
Total rents and other income from property 
 

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By chicken farmer
01st Oct 2014 21:41

why?
Why are you entering the same figure in box 29?

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James Reeves
By James Reeves
01st Oct 2014 22:22

Taxable income

You are effectively charging the company the same amount of rent that it is costing you to provide that space for the company use. This is why the figure you enter for expenses is the same as the income figure.

On your self assessment return you should really be breaking down the running costs of your home to include them in the relevant boxes of the return, rather than just "other expenses", but the effect is the same: you are providing your home to your company but not making a profit on it, so there is no taxable income from the property.

With no net taxable income there should be no effect on tax credits.

Be careful to ensure that no part of your home is used exclusively for business use, or there can be CGT consequences if you later sell.

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