"Claiming Back" money for house/electric etc

seismicryan

So I understand that as I work from home I can claim back a portion of my household expenses against my business profits. I know this kind of thing has been discussed on here before so I am hoping that these few questions I have not seen the answers to will be easy for you guys to help with...

I'm I right in saying I can claim a percentage of my total house costs based on the number of rooms I use? My house has 1 living room, kitchen, bathroom, bedroom, study, and storage room. I use the Study and Storage room for business purposes. What % can I claim? I wasnt sure about the storage room so I was thinking it would be 1/3rd?

My company is a limited company so I will actually be writing a cheque to myself, so I was wondering is there a specific way I need to account for this in my accounts? Like are there forms you need to fill out, or is it just like paying an employee for expenses, or just put an entry in the account journal as "house costs" or something?

What do I need to "provide the business with" as proof of costs?

I have an interest only mortgage, so am i still able to claim this back?

The items I think I should be able to claim are;

Mortgage payments
Rates
Heating
Electricity

are these all ok, and are there any others?

I'm sorry for any silly questions, but I just want to be sure before I claim stuff back..

thanks in advance!
Ryan

Mistral001

My accountant has advised me that if I claim more than a quarter of household bills, there could be problems with satisfying Planning and Building Control authorities that there is not a change of use.

Also I think you might have to inform the rates people as well as you might have to pay business rates.

I claim for all the things you have mentioned. You can claim for maintenance as well.

One other thing my accountant has advise me is that if I make a profit when selling my house I might be liable for some Capital Gains Tax.

I trade under my own name and do not have a Ltd company, so I do not know what the situation is regarding that is.

I would see an accountant in any case.

Savvy_Sue

Mistral001 wrote: »

I would see an accountant in any case.

good advice, I'd have thought you'd find it paid to do so if you're running a Ltd Co, just to make sure you're doing all you need to.

One way round the business rates / CGT 'issue', as I understand it, is not to use any part of the home exclusively for business use. So, if you do your ironing in a corner of the room you use as an office, or have a bed settee in there and it's the guest bedroom, you're away. But an accountant would confirm or deny this.

seismicryan

Savvy_Sue wrote: »

good advice, I'd have thought you'd find it paid to do so if you're running a Ltd Co, just to make sure you're doing all you need to.

One way round the business rates / CGT 'issue', as I understand it, is not to use any part of the home exclusively for business use. So, if you do your ironing in a corner of the room you use as an office, or have a bed settee in there and it's the guest bedroom, you're away. But an accountant would confirm or deny this.

I do have an accountant, and he has said to me about claiming back the house-hold costs.. the reason I am asking here is because every time I ask the accountant anything he charges me :mad: haha.. also, I just want to get all the information ready myself before I go ask the accountant about it..

I had actually read that thing about the ironing board here before I spoke to the accountant before, and mentioned it to him, and he said you dont really need to worry about that.. the tax man isnt really concerned with that..

Ryan

Mistral001

Savvy_Sue wrote: »

One way round the business rates / CGT 'issue', as I understand it, is not to use any part of the home exclusively for business use. So, if you do your ironing in a corner of the room you use as an office, or have a bed settee in there and it's the guest bedroom, you're away. But an accountant would confirm or deny this.

I did not know that. Thanks for the tip.

alexmoneysaver1

seismicryan,

That doesn't sound like good practice to me, maybe it's time to look for a new accountant? Our accountant is very helpful, takes time to talk to me and we regularly have free meetings as I stick with them each year.

Mistral001

alexmoneysaver1 wrote: »

seismicryan,

That doesn't sound like good practice to me, maybe it's time to look for a new accountant? Our accountant is very helpful, takes time to talk to me and we regularly have free meetings as I stick with them each year.

I agree that you should be able to ring up your accountant for a quick word of advice without charging you for it, but I can understand that many must get fed up with long phone calls or meetings on the minutest details and might have a policy of charging for every minute of time.

One other thing is that many accountants do not like to suggest ways of saving tax. The OP should get everything prepared before going to the accountant with figures and receipts for all possible things he think are costs to do with his business and then the accountant will advise him whether it is allowable.

seismicryan

As a matter of face I have just written a letter to our accountant raising concern about their fees as they charged us about twice as much as we were expecting to prepare last years accounts... our accounts are perfectly kept with every penny accounted for so unless they can assure us it will be a lot lower next year, we will be going elsewhere!

Ryan

terra_ferma

Mistral001 wrote: »

One other thing is that many accountants do not like to suggest ways of saving tax. The OP should get everything prepared before going to the accountant with figures and receipts for all possible things he think are costs to do with his business and then the accountant will advise him whether it is allowable.

I think it's part of their role to suggest way of maximising tax allowances and deductions, that are within the law and you are entitled to.
After all if we knew all the rules and regulations about what is and isn't deductible we would not need an accountant at all...

For example I'm very conservative with my expenses, and my accountant was able to advise that I can deduct much more than I was going to. All within the rules, nothing dodgy.

BoGoF

You wont be able to claim the rates (I assume you mean council tax) or the mortgage interest

seismicryan

BoGoF wrote: »

You wont be able to claim the rates (I assume you mean council tax) or the mortgage interest

Really? How come?

Ryan