We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Working From Home Allowance and VAT

Options
oompahloompah
oompahloompah Posts: 191 Forumite
edited 18 March 2010 at 12:20PM in Cutting tax
HI everyone
Could someone please clarify something for me?
I understand that self employed folks working from home can claim income tax relief to cover increased electricity etc used while working.
Would this be minus 5% VAT (assuming the business is VAT registered), with the VAT reclaimed through the quarterly return, or does the VAT not come into it at all?
Thanks

Comments

  • fengirl_2
    fengirl_2 Posts: 4,530 Forumite
    tTe £3pw alowance is for employees, not self employed people.
    If you are using part of your home for business, you need to include the proportion of your household running costs in relation to the number of rooms used. Therefore, if you have 3 beds and 2 receps and use one bedroom for business, you would include one fifth of the household costs in your accounts. VAT doesnt come into it as the business is not paying the household running costs, but merely reimbursing the busness owner for the use of the home.
    £705,000 raised by client groups in the past 18 mths :beer:
  • fengirl wrote: »
    VAT doesnt come into it as the business is not paying the household running costs, but merely reimbursing the busness owner for the use of the home.

    Thanks, that's what I thought but a SE friend said they reclaim the VAT on the allowance they claim for working from home, so I wanted to make sure. I'll let him know!
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.6K Spending & Discounts
  • 244K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.