Can I claim rent as expenses? and not the measly 'home working expenses' of 156?

[Jeystone]

Since I am a freelancer and work from home 70% of the time, can I not claim more than £156 home working expenses per year? Surely my rent should be considered a company expense..

[Bunk]

Since I am a freelancer and work from home 70% of the time, can I not claim more than £156 home working expenses per year? Surely my rent should be considered a company expense..

If you weren't working would you still need a place to live? Then it's not a business expense.

[Clare@InTouch]

Not your whole rent, no. You can however claim more than the £156 basic if you can justify it. Calculate the space in your house, the space used by you for business, and apportion costs on that basis, taking into account actual time used. Ask your accountant to check you're being logical, and keep all supporting information to prove to HMRC if they ever ask.

[Jeystone]

Not your whole rent, no. You can however claim more than the £156 basic if you can justify it. Calculate the space in your house, the space used by you for business, and apportion costs on that basis, taking into account actual time used. Ask your accountant to check you're being logical, and keep all supporting information to prove to HMRC if they ever ask.

thanks can you give me any examples?

[Clare@InTouch]

You can take into account:

Rent
Council Tax
Mortgage Interest
Home insurance
Internet line rental
Telephone line rental and call costs
Water rates
Light & heating costs

Specific deductions: use of home: specific expenses

Now calculate the total space within your house, ignoring hallways, the bathroom and the kitchen. Calculate the space allocated to the business. You can then apportion the total costs and arrive at the value attributable to the office space.

This amount should finally be adjusted for the actual hours in use. For example if you use the room for 8 hours every day then the value should be reduced to 33.3% of the total (24 divided by 8 = 3).



There's an example here from HMRC here:

Example 2
Bill runs a small business. He uses one small room at home as an office, exclusively for the purposes of his trade (CG64660). The room represents 5% of the floor area of the house.

His Council Tax, insurance and mortgage interest bills total £4500. He claims 5%, £225.

His electricity bill for heating & lighting is £300. He claims £15, which is 5% of the total.

His total claim is £240 (plus the business proportion of his phone bill).

Although Bill has apportioned his electricity bill by floor area rather than usage, the amount claimed is small and there is nothing to suggest that his business use is significantly greater or lesser than his private use. It can be accepted as a reasonable estimate.

Specific deductions: use of home: examples

[Danielsjdaccountancy]

You can take into account:

Rent
Council Tax
Mortgage Interest
Home insurance
Internet line rental
Telephone line rental and call costs
Water rates
Light & heating costs

Specific deductions: use of home: specific expenses

Now calculate the total space within your house, ignoring hallways, the bathroom and the kitchen. Calculate the space allocated to the business. You can then apportion the total costs and arrive at the value attributable to the office space.

This amount should finally be adjusted for the actual hours in use. For example if you use the room for 8 hours every day then the value should be reduced to 33.3% of the total (24 divided by 8 = 3).



There's an example here from HMRC here:

Example 2
Bill runs a small business. He uses one small room at home as an office, exclusively for the purposes of his trade (CG64660). The room represents 5% of the floor area of the house.

His Council Tax, insurance and mortgage interest bills total £4500. He claims 5%, £225.

His electricity bill for heating & lighting is £300. He claims £15, which is 5% of the total.

His total claim is £240 (plus the business proportion of his phone bill).

Although Bill has apportioned his electricity bill by floor area rather than usage, the amount claimed is small and there is nothing to suggest that his business use is significantly greater or lesser than his private use. It can be accepted as a reasonable estimate.

Specific deductions: use of home: examples

You need to be very careful here. Self-employed can claim the expenses list above but directors can't! Specific deductions: use of home: contents

quote 'It does not apply to the use of home by an employee or director - for this see EIM32760' onwards

Other expenses: home: working from home

Its a very common mistake to put rent, council tax etc through but this stopped in 05/06 now you can only claim

Other expenses: home: household expenses: expenses that are deductible

HTH

[Zoiderman]

You need to be very careful here. Self-employed can claim the expenses list above but directors can't! Specific deductions: use of home: contents

quote 'It does not apply to the use of home by an employee or director - for this see EIM32760' onwards

Other expenses: home: working from home

Its a very common mistake to put rent, council tax etc through but this stopped in 05/06 now you can only claim

Other expenses: home: household expenses: expenses that are deductible

HTH

I spoke to my accountant about this, as I have started moving my family with me on contracts. We still have a house in Surrey, which is empty, but we rent a house wherever the contract is. Luckily, last 3 contracts have been commutable from a house we rent. Accountant has said, we can claim all expenses, as long as we're not renting our house out, as the amounts I was spending on flights, food, drinks and hotels each week, was more than renting a house (Flights £130 a week, hotels £300 a week, allowances £125 a week - house rent plus bills £450 a week).

I guess it depends on the situation.

[malvolio]

I guess it depends on the situation.

No,. I guess it depends on whether or not your family's living accomodation is wholly business-related. You might struggle with that one. The expenses angle is not an issue, you can pay whatever you want, but your personal tax may be affected if HMRC consider this to be a BIK.

[Danielsjdaccountancy]

[QUOTE=Zoiderman;1406534]I spoke to my accountant about this, as I have started moving my family with me on contracts. We still have a house in Surrey, which is empty, but we rent a house wherever the contract is. Luckily, last 3 contracts have been commutable from a house we rent. Accountant has said, we can claim all expenses, as long as we're not renting our house out, as the amounts I was spending on flights, food, drinks and hotels each week, was more than renting a house (Flights £130 a week, hotels £300 a week, allowances £125 a week - house rent plus bills £450 a week).

You do need to consider the personal benefit here. Should your company be able to get tax relief on your family living costs? - I think I know HMRC's response to this.
If your family were living at your Surrey residence and you were visiting them on weekends, contributing to living expenses etc I could see this it being an allowable expense but moving your whole family from accommodation to accommodation, not sure they would be a fan. I would suspect they would switch where they deem your principle place of residence to be.

Feel free to call HMRC to discuss, you can call up anonymously for advice.

[NoviceContractor]

I spoke to my accountant about this, as I have started moving my family with me on contracts. We still have a house in Surrey, which is empty, but we rent a house wherever the contract is. Luckily, last 3 contracts have been commutable from a house we rent. Accountant has said, we can claim all expenses, as long as we're not renting our house out, as the amounts I was spending on flights, food, drinks and hotels each week, was more than renting a house (Flights £130 a week, hotels £300 a week, allowances £125 a week - house rent plus bills £450 a week).

I guess it depends on the situation.

I am in the same boat as you.

Do you claim all your bills(rent, council tax, electricity, gas, landline, broadband) from your limited company or a proportion of it, how do you calculate the proportion?
Have you taken your rent agreement and other bills(council, gas, electricity, landline, broadband, etc...) on your company name or is it on your name?
Do you also claim your daily grossory bills from your limited company?

Thanks