Home office expenses

D

diggerbarnes

Registered User
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Hi all,

I'm currently working as a contractor with my home set up as company's registered address (I typically work on-site).

I've two questions regarding my broadband / home phone connection:

1) Would I be better to have it in the company name or leave it as a private bill?
2) If I leave it as a private bill, what percentage is reasonable to claim back as an expense, and when calculating the percentage should I do it ex. VAT or inc. VAT?

Similarly for light and heat, what percentage would be (typically) correct to claim as an expense - 1/6? (Again, inc. VAT or ex. VAT?)

Thanks!
 
Dude I'm no tax expert but I think you have to be careful if you use part of your principle private residence as a business premises. If your house is sold (trading up etc) above the original purchase price you might end up having to pay tax on some of the gain made. As I say I’m no tax expert and maybe you know this already anyway.
 
Assuming your home office takes up a small fraction of the house, and electricity is for heating and light for one room, say, computer and peripherals, I would leave the bills in your personal name.
One sixth sounds reasonable to claim back, if one room is used as home office. You can only claim vat relief on the business expense, so one sixth of the net cost, then work out the vat on that for your vat returns.
Keep all records neatly with your company invoices, and mark on each the details of what refund you claimed frrom the company. As a straight refund of expenses this should be taxfree in your hands.
 
Thanks everyone.

I'll go with 50% on the broadband/phone expenses (this would be an accurate reflection of use) and 1/6 on the light and heat, both based on the VAT exclusive figures.

(I mightn't bother claiming the VAT back as it'll amount to no more than a couple of Euro each month, I'll see how the figures work out.)
 
I am an employee for a multinational company, working from home, which I am renting. Can I claim tax relief on a portion of my rent? As an employee (not self employed) can I claim tax relief on utility bills?
 
Hi diggerbarnes, my business provides accountancy solutions for contractors. I'd be happy to run through some of your home office expense and other queries if you want to PM me.

Bogle is also correct that if you use part of your home for business purposes, it will affect your entitlement to principal private residence relief when you come to sell your home and you pay be liable to pay CGT on a portion of any gain made. It's just something to bear in mind and be fully aware of before you decide to claim for home office expenses.
 
If your a sole trader working predominantely from a van with services at your home for broadband and telephone to pick up jobs etc, do you claim all the cost of the services through the business? If not what is an exceptable percentage to be allocated to personal use?

Thank you
 
Telephone -- if you use your landline, and it is not a second line purely for business, then you can't claim for the cost of line rental, and can claim the business percentage of the cost of calls. To calculate this you will need to take bills for a period of time, and analyse the cost of the calls to get the relevant percentage.

If you have a second landline just for business you can claim 100%, or the costs of a mobile if purely for business (with incidental personal use).

Re broadband costs - Revenue are unlikely to accept 100% business use, but would perhaps accept 90% or 95%, but this will depend on your personal circumstances - do you have kids using this also etc. You need to estimate your own business percentage on a realistic basis.
 
There've been other similar threads on this issue - check those - esp re the CGT-PPR implications.
 
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