I have tried to research previous threads but couldn't find a definite answer.
My client (director of ltd co) is having her whole house extended and one of the new room will be used as her home office. Up until now she had her desk and files in a corner of the sitting room but this new room will allow her to have a dedicated space for work and client's meeting. So far she has only claimed £4 a week as use of home but I suggested we draw up a rental agreement between her Ltd co and owners of the house (her husband and herself).
The idea is to charge a rent equal to a fair apportionment of fixed and running costs of the house (area and usage of office).
Besides the usual expenses such as council tax, utility bills, mortgage interests... are there any other costs they could claim, such as capital allowances (on furniture and fixtures) for the rental business? I am aware of the restriction of claims for CA in a furnished dwelling however if this is a commercial lease would they be available?
Also if we have a commercial lease what are the implications regarding business rates? and would a non exclusive use (to avoid some loss of PPR) prevent it from being a commercial lease in the first place?
Another suggestion would be for the company to bear the costs i.e. furniture - some are 100% business use (i.e desk/ filing cabinets) but she also bought a nice expensive sofa which would probably attract a BIK. I believe VAT reclaimed would also have to be apportioned according to business use.
Again I am unsure as to which costs would be available if supplied to the company - things like radiators, carpet, paint etc...used exclusively for the office. I don't believe they are but would appreciate if someone could point me to the legislation on this.
And of course the client is adamant all the costs should be put through the company.
Sorry for such a long winded question. I am grateful for your comments.