Our practice currently uses £15 per week for sub contractors for a charge for use of home as office.
This charge arose from a tax enquiry into a sub contractor back in 2004.
Is there a fixed amount that other practices are using?
If so how much?
Replies (10)
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Always find using actual household bills and allowing one room, as a office, as a percentage of total rooms in the house (excluding bathroom and kitchen) the best way of getting this expense. You could use actual floor areas if you want a more exact figure so that HMRC can't challenge the expense.
Or Simplified expenses
https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home
Potential can of worms
Allocating 1 room in the house arose to a potential CGT claim from HMRC on sale where as PPR usually applies as apportioning 1 room specifically dedicated to business use deemed the property potentially as commerical use.
Not only tax where interested the local council wanted to apply business rates and it may have not stopped there i.e business gas/elec , water rates
so stick with a arbitrary figure would be my advice or apply simplified expenses as above.
What about...
Claiming 1 / no. of rooms + 1 on the basis that no one room is used exclusively for business purposes to get around the potential business rates/CGT issue?
remove a percentage for personal use
If you base it on the number of rooms, I was always advised to look at the use of the room over a week. If the children use the room to do their homework on the computer, if your partner uses the room to do the household budgeting, or even if there is a bed in the room that is used on week-ends. You can apportion the use of the room after finding out the value based on the number of rooms in the house etc. So that it is not a dedicated office the whole time.
@OP
I am intrigued.
Are you saying that the enquiry in effect gave a blanket approval of £15 pw to all subcontractors irrespective of the nature of their trade and work, or of the actual expenses and usage of home.
Hmm
Have all your subbies got the same number of rooms in their houses and the same insurance/mortgage/elec bills ?