Limited company renting my home office

[Belle]

My limited company has a contract with a consultancy that does not provide me with office space. Therefore, I either have to rent a desk somewhere (at the approximate cost of £200 per month) or I can work from home. I have decided to work from home and so I (personally) will charge the limited company rent for this (£200 per month). Has anyone set up something similar and what sort of contract do I need between myself and the limited company? Are there any templates for this?

[xoggoth]

Unfortunately I have shoved all my box files on tax rubbish up in the attic but your company can have a rental contract with you and there is a template online somewhere. There is a site that provides a whole load of free templates for tax things, if the name comes back to me I will post it.

[blacjac]

Funnily enough I was researching this myself yesterday and found this thread:

http://forums.contractoruk.com/accou...dividends.html


The template Xog mentions is in there....

[Sockpuppet]

I'm not seeing the point here assuming your a shareholder / normal contractor model.

You'll pay more tax as you have to pay Tax/NI on the £200 a month. Also you could be liable for business rates as you are renting it out to a business.

[MPwannadecentincome]

I'm not seeing the point here assuming your a shareholder / normal contractor model.

You'll pay more tax as you have to pay Tax/NI on the £200 a month. Also you could be liable for business rates as you are renting it out to a business.

I had heard that you could be liable for capital gains tax on part of your property too if you rent out a part of your home to your business, might not be a problem if house prices don't go up, but do some research.

[HairyArsedBloke]

At £200pcm I'd jump at it! I'm working from home and I hate it.

[d000hg]

I don't think you can just decide what to charge. Instead, you're supposed to work out what % of the building is used for the office (in terms of floorspace), multiply that by what % it's used for business, and that gives the fraction of utility bills you can charge your company for.

e.g if your house had 10 equal sized rooms and you also use your home office for practising your accordion skills in the evenings, you would not really be able to go above 5-10% of you actual costs in terms of electricity, internet, etc.

Trying to make a profit from a home office is a bad plan, is my advice.

[Gonzo]

I'm with everyone else and cannot see the point in doing this.

You will still have to pay tax on the money and by charging a commercial rent you are effectively turning your home into commercial premises which has implications for rates and for Capital Gains Tax.

There is a small amount that you can charge your company for use of home which won't attract any unwanted attention, but this always used to be no more than £2 per week.

I should add IANAA.

[xoggoth]

That portion of the rent that is necessary expenses should not be taxable anyway.

http://www.hmrc.gov.uk/manuals/senew/SE32810.htm
http://www.hmrc.gov.uk/manuals/senew/SE32815.htm

That capital gains tax/business thing has in the past attracted differing opinions even on accountingweb but (entering xoggoth extremely vague mode) sure I have seen more recent official guidance that a single room as office space is not a problem. Do a serach.

[PhilAtBFCA]

Belle

There are five potential ways of being extracting money out of your company for the fact that you work from home.

Each option may be useful for a different circumstance.

In the case of renting your home to yourself the answer, covered in this link with the other 4 options, is yes you can, but are you sure you really want to ? The disadvantages may well outweigh the advantages !

With any tax planning like this there are normally at least two perspectives a) personal taxation and B) company taxation - It is the interaction of these two perspectives that makes for good tax planning.

Phil