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Sole Trader working from home - expenses

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MT2006
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2011/03/14 15:56:16 (permalink)

Sole Trader working from home - expenses

Hi,
 
Will be moving to my own place shortly. I am buying, so will have a mortgage.
 
I work from home.
 
Are you allowed to put e.g. 1/5 (if office is one of 5 rooms - it is a 2 bedroom apartment) of bills as business expenses? What about some fo the mortgage lol (guessing not)? Does anyone know for sure - otherwise I will seek advice from an accountant.
 
Thanks
#1

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    Tony Barnes
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    Re:Sole Trader working from home - expenses 2011/03/14 16:01:04 (permalink)
    You can get money towards some bill for the house provided you are using it for business on a permanent basis - i.e. permanent office - and it can be justified - i.e. duck ponds don't count (unless you're an MP, obviously).

    Mortgage & council tax are NOT helped with, as it is a given you will have to pay them anyway.

    Some good info somewhere, read it the other year.... yep, here you go http://www.direct.gov.uk/...esandreliefs/DG_078386
    #2
    essex_chris
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    Re:Sole Trader working from home - expenses 2011/03/14 16:03:25 (permalink)
    You can claim more than you might think, but not some of the stuff you mentioned. Tonys link is something i might have googled for.

    If you are considering an accountant, they will be able to help you with plenty of stuff you can or could claim.

    Awesome pic, but Tony you're not doing yourself many favours posting up tips on preventing the gag reflex and then a picture of a guy touching his toes - Ak
    #3
    GRIFF 1980
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    Re:Sole Trader working from home - expenses 2011/03/14 16:10:12 (permalink)
    Hi

    I'm an accountant. the link above is a good one.

    Yes you can claim, all items need to be "wholly and exclusively for business purposes", hence why items such as a mortgage would not be tax allowable.

    "Wholly and exclusively" are the key words here.
     
    Another good link below
     
    http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1086700276&r.i=1086699971&r.l1=1073858808&r.l2=1086692188&r.l3=1086699413&r.s=sc&r.t=RESOURCES&type=RESOURCES
    post edited by GRIFF 1980 - 2011/03/14 16:11:43


    "Knowledge is knowing the Tomato is a fruit, wisdom is not putting it in your fruit salad"


    #4
    Oldy
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    Re:Sole Trader working from home - expenses 2011/03/14 16:20:54 (permalink)
    Please note your home insurance will have to be updated to business insurance and this i believe is a lot more expensive then normal home insurance.
     
    The same goes for your councill tax as you have to pay some business rates as well.
    #5
    kitty
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    Re:Sole Trader working from home - expenses 2011/03/14 16:26:32 (permalink)
    You only need to pay business rates if the 'office' is only used for business purposes. I have an 'office' in my dining room but because it is fully functionable as a dining room I don't need to pay business rates!
    #6
    MT2006
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    Re:Sole Trader working from home - expenses 2011/03/14 16:30:50 (permalink)
    Cheers guys. Thanks for the link Tony :)

    Kitty -  if that is true, I will stick a table in there, and it can be my dinning room . Be a bugger if I have to pay increased rates
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    essex_chris
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    Re:Sole Trader working from home - expenses 2011/03/14 16:32:09 (permalink)
    Wholly and exclusively. When i had an accountant he advised that i claim both the mobiles i had for work and personal use, but only half of the cost of the personal line as i would use it to make work related calls when i didn't have my work phone on me and something came up.

    It's surely a little more complicated. I would claim for my personal car when i did mileage that was work related.

    So can't you claim part of the cost of something it the thing is somewhat used for work and incurs an expense?

    Awesome pic, but Tony you're not doing yourself many favours posting up tips on preventing the gag reflex and then a picture of a guy touching his toes - Ak
    #8
    Arfie
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    Re:Sole Trader working from home - expenses 2011/03/14 20:01:46 (permalink)
    Be careful.

    Yes, you can claim some expenses (a portion of light & heat bills for example) on a fairly routine basis with few questions asked. However, beyond a certain level (claiming a proportion of mortgage interest is an example, claiming business rates another) then you risk that bit of your home being classed as business premises.

    When you come to sell you could lose the Principal Private Residence tax exemption on the "business bit" of your home, and that cost could easily outweigh the tax that you've saved on the previous expense claims.

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    All4n
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    Re:Sole Trader working from home - expenses 2011/03/14 20:45:41 (permalink)
    How do you work out how much of a percentage of something to claim?

    I mean a car you can add the mileage up. But for example with a contract phone how do you determine how much of the bill you can claim for?

    What if you live with parents and use their home as an office? How would that work?
    #10
    kitty
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    Re:Sole Trader working from home - expenses 2011/03/14 21:06:47 (permalink)
    Yes its true and here are some examples showing you typical what's acceptable and what's not.

    http://www.voa.gov.uk/publications/public_fact_sheets/working_from_home.html
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    jw8725
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    Re:Sole Trader working from home - expenses 2011/03/15 00:19:25 (permalink)
    out of interest what is it you do from home?

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    #12
    MT2006
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    Re:Sole Trader working from home - expenses 2011/03/15 10:53:20 (permalink)
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    GRIFF 1980
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    Re:Sole Trader working from home - expenses 2011/03/15 11:15:00 (permalink)
    Arfie makes a good point with regards to the Principal Private Residence Tax exemption, this would only be lost if there was exclusive business use to part of the property so you need to ensure the room you work in is available for both business and domestic use.

    In response to All4n, you could claim for business calls if you had a contract mobile, you could not claim for line rental.
    If you live with parents and using a room there as an office I can't see an allowable claim as you are not the principal person responsible for payment of the bills relating to that house.


    "Knowledge is knowing the Tomato is a fruit, wisdom is not putting it in your fruit salad"


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