Home Office / Dividends

**NotAllThere** · 12 September 2007, 13:42

The proportion of the home that is actually used as an office is the proportion of expenses you can take from the company. So, if you're paying £4k a month rent, and the "office" is dedicated to your work, and it's about 10% of the whole, house, then you can claim £400 a month.

I don't know how much the office has to be dedicated for work.

You could possibly find yourself liable for business rates. And your landlord might object.

There should be a minuted meeting for each divident payment. You can write these yourself. You can also write your own dividend tax credit.

Have you not asked your accountant these questions?

**kirk** · 12 September 2007, 14:17

use of home = £2 per week.

**backlight** · 12 September 2007, 14:33

Originally posted by NotAllThere View Post

The proportion of the home that is actually used as an office is the proportion of expenses you can take from the company. So, if you're paying £4k a month rent, and the "office" is dedicated to your work, and it's about 10% of the whole, house, then you can claim £400 a month.

I don't know how much the office has to be dedicated for work.

You could possibly find yourself liable for business rates. And your landlord might object.

There should be a minuted meeting for each divident payment. You can write these yourself. You can also write your own dividend tax credit.

Have you not asked your accountant these questions?

The company I have used to set up my ltd company and act as accountancy has in my opinion not been proactive in providing advice or quick to respond to queries. Based on what I have seen to date I will not stay with them for the next company year. I feel there is better, more realistic information to be found on CUK in many instances.

In relation to company use of a private residence – maybe you can expand on my situation. Lets say I have a one bedroom flat with a main reception room. I use the portion of the reception room for my office, lets say 50% of the reception room or 30% of the flats square footage – would 30% of the total proportion of rent/bills be a suitable amount to claim as an expense? What form of receipts should be produced for this situation? Is it necessary to create a tenancy agreement between myself and the ltd company for use of the space?

Also why would the landlord be concerned in relation to the rates when I pay the council tax? Further at which point would the council change the tax base for the property?

Thank you again for your advice.

**Bluebird** · 12 September 2007, 14:39

Originally posted by backlight View Post

Hoping some of you can assist.

I’ve recently joined the contracting world and need clarification with two items.

1 - Use of your home as an office, if I rent my home what portion of the rent and bills can be attributed as a business expense?

2 – Dividend payments – I intend to pay myself in the following order, reimburse expenses, salary, and then a dividend payment. Can someone advise how the company should document a dividend payment, do I have to minute a board meeting outlining each dividend payment. In general would my accountant produce a dividend receipt for personal tax purposes, or does that responsibility fall on the company director?

Thanks…..

1. Use of office as home is usually a set value per week - some say £2 others £10 - HMRC say that one way to calculate is to divide your utility bills by the number of rooms.

2. Yes, you need documentation for each dividend, and a tax voucher for each one as well. I've got a spreadsheet that does all that each month and if HMRC ever need it I'll just print of the relevant pages for them of the workbook. Your accountant may do this for you, but it's your responsibility [ as director ] to make sure it gets done - I'd prefer to do it myslef than pay someone else to do it.

**Pickle2** · 12 September 2007, 15:12

You can stick the relevant proportion of rent through too. The PCG had a big article on what you can and cant claim in a recent issue of "freelancing matters".

http://www.pcg.org.uk/cms/images/sto...Matters_11.pdf

pages 21 ish

**backlight** · 12 September 2007, 15:18

Originally posted by Pickle2 View Post

You can stick the relevant proportion of rent through too. The PCG had a big article on what you can and cant claim in a recent issue of "freelancing matters".

http://www.pcg.org.uk/cms/images/sto...Matters_11.pdf

pages 21 ish

Perfect - Exactly what I was looking for! Thank you..

Please excuse my last post - takes a while for the mods to approve my posts. Don't know why they still have to do that...

**philip@wellwoodhoyle** · 12 September 2007, 16:06

Originally posted by Pickle2 View Post

You can stick the relevant proportion of rent through too. The PCG had a big article on what you can and cant claim in a recent issue of "freelancing matters".

http://www.pcg.org.uk/cms/images/sto...Matters_11.pdf

pages 21 ish

Just be careful of that article - it relates to "Self employed" i.e. sole trader and partnerships as it was based on extracts of HMRC's business income manual.

If you are a director/shareholder of your own limited company, you aren't self employed and so the rules for use of home etc are contained in HMRC employment manual which basically restricts your claim to £2 per week unless you actually rent/licence space in your home to the company.

**kirk** · 12 September 2007, 16:49

The GBP 2 per week information came from my accountant

HTH

**backlight** · 12 September 2007, 21:27

Originally posted by kirk View Post

The GBP 2 per week information came from my accountant

HTH

This is odd.. My accountants guide seems to be saying the same thing (2GBP / week)- but if you look in the SJD contractor guide is aligns with the PGC article and the SJD guide is written for ltd companies.

Which is correct?? Would love to expense a portion of my rent - seems fair as the company does operate from the flat.

Home Office / Dividends