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Back-dating home office allowance claim

Hi all,

I’m the director of a small limited company, and I’ve just found out that I can claim the HMRC Home Working allowance of £4 per week (£216 per year).

For 2018-19, I intend to submit an invoice to my company and then just transfer £216 into my bank.

But - I also understand this can be back-dated, so how would I do this? Can I just amend my personal tax return in self-assessment to add the expense on?

Many thanks,

Tom

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14th Feb 2019 07:36

On the information provided you are not eligible for the allowance. And you certainly cannot invoice your company for it, though you can of course invoice your company for other things.

I wouldn’t worry too much about that though - I suspect that these mistakes are trivial compared to the rest of your errors.

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14th Feb 2019 07:54

Was there really a need to be impolite with that comment?

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to teejay091
14th Feb 2019 08:49

teejay091 wrote:

Was there really a need to be impolite with that comment?

Now you are on to passive aggressive responses. That’s stage two.

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14th Feb 2019 07:58

What did you accountant say when you asked him?

Don’t raise an invoice, just transfer the money.

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15th Feb 2019 09:49

Hello,

Directors are not allowed to claim this allowance I'm afraid, but they can rent their office to the company if the correct paperwork is produced.

It seems as though you don't have an accountant. We would strongly suggest you get one, as Googling and going on forums can lead to misinformation and mistakes. Most of the time a good accountant can save you a lot of tax and be worth their weight in gold. They can also make sure you keep on the right side of the HMRC.

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15th Feb 2019 09:56

Thank you Sally, massive help.

I do have an accountant but he purely deals with the annual accounts - I.e. doesn’t provide advice on a daily basis.

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to teejay091
15th Feb 2019 10:42

This kind of advice is part and parcel of the annual accounts service in my view, even more so if they prepare your personal tax return. You don’t need daily advice.

Ask your accountant, it will take less than 5 minutes to do the relevant calculation based on the information you give him. Most likely an oversight.

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16th Feb 2019 15:39

@sallyrichardson "Directors are not allowed to claim this allowance"
Please provide a citation.

Directors are employees, so technically would be claimed through personal tax.

Interesting link:
https://www.accountingweb.co.uk/any-answers/use-of-home-for-small-limite...

"HMRC have said they will not challenge use of home costs at this rate."

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17th Feb 2019 16:46

Hello Gone Sailing

I had an in depth conversation with an HMRC technician a while back and he referred me to the below - as on the HMRC website

"You may be able to claim tax relief for some of the bills you have to pay because you have to work at home on a regular basis. You cannot claim tax relief if you choose to work from home."

He stated that general employees who are made to work from home by their company can claim the allowance, but directors who clearly choose to base their own businesses in their home, cannot claim. He also said that why they made the choice i.e. monetary savings etc does not come into it.

We have found that in 99% of cases a rental agreement correctly set up is always more tax efficient anyway.

https://www.gov.uk/tax-relief-for-employees/working-at-home

teejay091 - we agree with the other posts - if your accountant is not looking at your overall tax position and providing the best advice for you to minimise tax as a whole, they're only doing half a job.

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to sallyrichardson
19th Feb 2019 10:39
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to Chris.Mann
19th Feb 2019 11:54

Why are you both quoting HMRC guidance and manuals? They have little to do with the legislation.

Provided the deduction can be made to fit into ITEPA Part 5 Chapter 2, then it's allowable (regardless of whether or not the claimant is a director).

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to SteLacca
19th Feb 2019 12:09

SteLacca wrote:

Why are you both quoting HMRC guidance and manuals? They have little to do with the legislation.

Now, there's a statement!

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to SteLacca
19th Feb 2019 15:49

"Why are you both quoting HMRC guidance and manuals?"

Just trying to help out actually! Lesson learned, quite obviously!

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19th Feb 2019 11:56

@ Chris.Mann
Thanks for the citation.
Interesting though I don't see a limit set in this section - does it necessarily take the £4 / week from S336?
S316A is described as "much less restrictive".

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to Gone Sailing
19th Feb 2019 13:16

£4 pw is an arbitrary sum that HMRC have said they won't challenge. It isn't supported by legislation, and so cannot be taken to be restrictive. If a higher sum can be justified and defended, then a higher figure can be claimed.

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19th Feb 2019 15:54

Thanks for the input everyone!

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