Question about what % of your household bills you can claim for if working from home.

[peasoup]

Can't remember any of this; it's all so dull, but do you know what percentage of my household bills I can claim as expenses for tAx purposes if I work from home? And is it all bills, phone, gas, lecky, council tax? I use one of the bedrooms in an 3 bed house, so is it a third? Also can i claim the fees i pay my accountant as legitimate expenses?! God it's all so dull. While I'm at it does anyone have a nioce sympathetic accountant in London who can explain things nice and simply and I can use; one that is good at small sole trader businesses. My one just likes to go on and on and on, and i still never know what he's on about.

Hello Peasoup. We've spoken before, but I was under yet another name...

I can't say definitively, but we had a talk from a tax official on our business course, and he kept saying 'claims must be REASONABLE'. I believe that you can claim the rent as a proportion of the rooms (I am going to count the total rooms and claim a sixth of the rent.) I am going to calculate the actual heating and electricity, etc. I don't think they will quibble though whatever if it is in the allowable expenses column and you are not taking the piss. You can call their help lines too and I believe get quite friendly and good advice.

Hello Brokenrecord; wonder who your previous incarnation was; did we talk about wedding photgraphy? Thanks for the advice.

The fees you pay your accountant are usually deductible if they are for day to day matters (rather than acquiring or disposing of a company say). In terms of household expenses you should count the total number of rooms excluding kitchen and bathroom and then use that as the denominator).

We usually claim for 50% but as our business increases (B&B) then we will claim more, accountant sorts that part out for us.

Yes we did. I think that that client was looking to get a cheap quote - hence not getting back in touch. I had done a small amount of work earlier for a mutual friend for free, and with hindsight I think that was why I got the call!
I'm glad I said no as I think it was a very pressurised occasion to say the least.

How is your business going? I took a lot of time out in the summer, but am doing some serious marketing now that my youngest is at school full-time.

I was told by an accountant that if I claimed expenses for working from home (in terms of a share of bills) then I risked problems with my home being a business-use property, so it was best avoided.

What are those problems? Is it a council tax thing? So many people seem to do it I can't believe they all get their houses re-defined.

If you claim 20% of your household bills as a business expense, HMRC will want to subject 20% of the property to capital gains tax when you sell your house.

It's a capital gains tax issue. Usually you don't pay capital gains tax on your principal private residence, but if claim that part of your house is for business use only then that part isn't part of your ppr. Only an issue if you stand to make a large gain when you sell.

Ooops x post. It is the proportion of the gain though, not the proceeds. And there are various reliefs available.

Yes that's it and it all looked massively complicated and potentially hideous

some guidelines here (not sure how useful or correct they are)

when i rented i charged 1/9 of household expenses including rent because i had 9 rooms and 1 was used as office. now i own my property i charge myself some COSTS eg electricity etc but no 'rent' because of the captial gains thing. My accountant and i have agreed £15 week and it has never been questioned.

now I am reading more more articles and the more recent ones say that this has been scrapped

but it still seems very complicated

why can't HMRC just do a bloody WIZARD on their website FFS?