Is use of home office a BIK?

[d000hg]

I got my 18/19 tax code and it has changed from 1616L to 1125L X (not sure why the big change). I was curious that they have taken my personal allowance of £11850 and reduced it but £600 for benefits in kind. Checking my last P11d it does list £600 under "expenses-other".

The lack of expenses I have and the number being exactly the same as the £50 MyCo pays for use of full-time home office makes me assume that's the culprit but to my recollection this isn't a BIK - otherwise there would be no point doing it?
I don't recall seeing this before or asking about it before so can someone tell me if my mind is likely playing tricks on me, if the rules have changed, or if this is likely a mistake?

For those who may query £50/month, I have been doing this for about the last ten years so without getting into a debate on the matter, it hasn't changed which seems pertinent.

I'm fairly sure my P11D questionnaire always ends up listing zero - this was via the InTouch system - but I hadn't spotted the figure on the official filed paperwork from a couple of weeks away which I should've checked more carefully.

[malvolio]

The acceptable level for use of a home office not to be a BIK is £10 month for up to 50 hours work a month from home, up to £26 a month for over 100 hours, and has been for a long time. The fact you've been claiming a lot more for ten years doesn't mean you're right, only that HMRC have just noticed it.

There are other variations - a nice summary is over here.

[mudskipper]

The acceptable level for use of a home office not to be a BIK is £10 month for up to 50 hours work a month from home, up to £26 a month for over 100 hours, and has been for a long time. The fact you've been claiming a lot more for ten years doesn't mean you're right, only that HMRC have just noticed it.

There are other variations - a nice summary is over here.

This is news to me - AIUI the standard 'rate' is £4 a week, or calculating proportions based on bills and use.

Following the links from that article, the HMRC pages talk about self employed/sole traders, not ltdCo.
https://www.gov.uk/simpler-income-ta...king-from-home

[jamesbrown]

This is news to me - AIUI the standard 'rate' is £4 a week, or calculating proportions based on bills and use.

Following the links from that article, the HMRC pages talk about self employed/sole traders, not ltdCo.
https://www.gov.uk/simpler-income-ta...king-from-home

You're correct. The figures Mal quotes are for sole traders, not company directors or employees. For a company director or employee, the standard amount YourCo can pay without keeping records is £4 per week or, even better (woohoo), £18 per month. Obviously, you can try to factor the actual costs, and keep appropriate records, but it's rarely worthwhile, unless your time is cheap and/or you have a tiny house with one very large room in which you work.

[malvolio]

Fair enough, other than we don't know the OP's status...

Personally I've never bothered: if £216 a year is significant I'm in the wrong game

[jamesbrown]

I got my 18/19 tax code and it has changed from 1616L to 1125L X (not sure why the big change). I was curious that they have taken my personal allowance of £11850 and reduced it but £600 for benefits in kind. Checking my last P11d it does list £600 under "expenses-other".

The lack of expenses I have and the number being exactly the same as the £50 MyCo pays for use of full-time home office makes me assume that's the culprit but to my recollection this isn't a BIK - otherwise there would be no point doing it?
I don't recall seeing this before or asking about it before so can someone tell me if my mind is likely playing tricks on me, if the rules have changed, or if this is likely a mistake?

For those who may query £50/month, I have been doing this for about the last ten years so without getting into a debate on the matter, it hasn't changed which seems pertinent.

I'm fairly sure my P11D questionnaire always ends up listing zero - this was via the InTouch system - but I hadn't spotted the figure on the official filed paperwork from a couple of weeks away which I should've checked more carefully.

FWIW, you probably cannot justify the £50 per month (I work from home full time and claim the standard rate of £18 per month) but, if you don't have the paperwork/calculations to demonstrate why it's £50, then you definitely won't be able to justify the claim.

As to "why now", exemptions replaced dispensations on 6 April 2016 and I believe you now need an exemption from HMRC for something other than £18 per month or £4 per week. You don't have it, so...

[jamesbrown]

Fair enough, other than we don't know the OP's status...

Personally I've never bothered: if £216 a year is significant I'm in the wrong game

Agreed... hardly worth it, but the £216 is easy, anything else isn't. OP did mention "MyCo" FWIW.

[mudskipper]

Fair enough, other than we don't know the OP's status...

Personally I've never bothered: if £216 a year is significant I'm in the wrong game

On the other hand, why wouldn't you claim it? It's as simple as setting up a recurring expense in freeagent (or on the InTouch portal which the OP is using).

Your £216 probably bumps up to more than an average day's rate by the time you factor in higher rate tax. On a 20 year contracting career, that's a month's billing!

[Neil@Intouch]

I got my 18/19 tax code and it has changed from 1616L to 1125L X (not sure why the big change). I was curious that they have taken my personal allowance of £11850 and reduced it but £600 for benefits in kind. Checking my last P11d it does list £600 under "expenses-other".

The lack of expenses I have and the number being exactly the same as the £50 MyCo pays for use of full-time home office makes me assume that's the culprit but to my recollection this isn't a BIK - otherwise there would be no point doing it?
I don't recall seeing this before or asking about it before so can someone tell me if my mind is likely playing tricks on me, if the rules have changed, or if this is likely a mistake?

For those who may query £50/month, I have been doing this for about the last ten years so without getting into a debate on the matter, it hasn't changed which seems pertinent.

I'm fairly sure my P11D questionnaire always ends up listing zero - this was via the InTouch system - but I hadn't spotted the figure on the official filed paperwork from a couple of weeks away which I should've checked more carefully.

This is incorrect. The expenses pulled into section N of the P11d are allowable business expenses claimed, so no BIK and HMRC have incorrectly pulled this into the tax code amendment. Two easy ways to correct this:

1. Login to your online account with HMRC and removed the benefit in kind expenses.
2. Drop an email to your Accountant at InTouch and we will sort it out with HMRC direct.

[northernladuk]

2. Drop an email to your Accountant at InTouch and we will sort it out with HMRC direct.

Your accountant is telling you to speak to your accountant