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Home working expenses Limited Company

Home working expenses Limited Company

My client, an architect operates through a limited company.

He has business premises but for some of the year has worked some of the time from his own house on design work for clients.

I'm intending to make a deduction from the limited company as an expense as follows:

Take the proportion of that room used for business as a proportion of the whole house living space X for the number of days so used /365 and apply that:

Heat and lighting cost.

Council tax cost. (Bit unsure on this because do not want to incur business rates ?)

Then invoice this cost from himself to his limited company, therefore reducing his CT profits by this amount.

Include the invoice as income in his personal tax return but offset by the same amount of expense.

Not sure if I may be better off using the HMRC Rate of £4 / week but thats not likely to cover actual costs.

It seems perfectly reasonable to me, but I would be very grateful to hear if this has generally been done by any Acc Web fellow accountants or if it is just likely to generate more bother than its worth.

Thank you



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14th May 2012 22:38

I have see this done

but the calculation was done as 8 hours per day in use out of 168 hours per week, and the mortgage interest was included in the cost. For one day per week use of room as working space at home was no more than the HMRC allowance.

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