• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

How to work out expenses for mortgage?

Collapse
This topic is closed.
X
X
Collapse
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    #51
    Originally posted by d000hg View Post
    And then what defines a PSC? I have two current clients. One is local, a traditional contracting gig but I WFH as I don't have a car. The other is in another country and requires I work from my own site, I also provide a 2nd person tot hem alongside myself.
    MyCo is also actively developing its own software products to sell.

    So now what - am I a PSC or am I a real business which does some consultancy work?
    In true HMRC fashion, it's not an exact science to define, otherwise that would make it harder for them to hide behind a smokescreen!

    Here's a rough outline of what consitutes a PSC:
    A Guide To Personal Service Companies for IT contractors :: Contractor UK

    Comment


      #52
      Originally posted by d000hg View Post
      And then what defines a PSC? I have two current clients. One is local, a traditional contracting gig but I WFH as I don't have a car. The other is in another country and requires I work from my own site, I also provide a 2nd person tot hem alongside myself.
      MyCo is also actively developing its own software products to sell.

      So now what - am I a PSC or am I a real business which does some consultancy work?
      Thx d000hg, good to have someone on my side.
      I am in similar situation to you. I typically do a normal contract job 40 hours a week. Then do another 20 hours freelance (weekend and after hours). I have one client in london, and few overseas from guru.com. Its impossible I work on site for these freelance clients because:
      - their office is closed on the weekend (for london client)
      - their office is overseas (for guru clients)

      So would be good if ppl on here could consider working from home more seriously. I believe this is not an uncommon situation for contractors..

      Comment


        #53
        Originally posted by lithium147 View Post
        Thx d000hg, good to have someone on my side.
        I am in similar situation to you. I typically do a normal contract job 40 hours a week. Then do another 20 hours freelance (weekend and after hours). I have one client in london, and few overseas from guru.com. Its impossible I work on site for these freelance clients because:
        - their office is closed on the weekend (for london client)
        - their office is overseas (for guru clients)

        So would be good if ppl on here could consider working from home more seriously. I believe this is not an uncommon situation for contractors..
        What's your point? That you're not a PSC and therefore you can get around the PSC rules on not claiming mortgage back, etc? (doohg is approaching a grey area with his software development/sales.) Because you still sound like a PSC to me; it's not about where you work, it's about what you do, and you sound like the only income-earner for your company and that requires your personal service, therefore you're a PSC.

        From my last link:

        Notionally, a PSC in its current sense (which has its origins in the Government’s efforts to define and justify the intermediaries legislation) means a company that sells the work of an individual or group of individuals, and which is owned and operated by that individual or group of individuals.

        EDIT: I work from home too (mostly). I'm still very much a PSC though.
        Last edited by captainham; 11 October 2012, 07:47. Reason: edit

        Comment


          #54
          Originally posted by lithium147 View Post
          Thx d000hg, good to have someone on my side.
          I am in similar situation to you. I typically do a normal contract job 40 hours a week. Then do another 20 hours freelance (weekend and after hours). I have one client in london, and few overseas from guru.com. Its impossible I work on site for these freelance clients because:
          - their office is closed on the weekend (for london client)
          - their office is overseas (for guru clients)

          So would be good if ppl on here could consider working from home more seriously. I believe this is not an uncommon situation for contractors..
          It's not about having someone on your side. It's not an argument. It's a free forum with people giving input. If you want the right answer you should go speak to a professional.

          Do you put this freelance work through the LTD???

          The fact you only do 20 hours and is not your main income should also factor in to your percentage of floor space so brings down the actual amount even more to less than peanuts. Sounds like the £4 is actually going to work out better. Go get some professional advice rather than coming on here looking for the answer you want to hear.

          I believe it is uncommon and would guess 95% of contractors just go to work as usual and use the home office occasionally.
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #55
            I am going on what Sally@InTouch posted:
            It will usually be possible to demonstrate that the work that the director or employee carries on at home is not the substantive duties of the employment, see EIM32780. A director or employee may do some paperwork at home while the duties from which the service company earns its income are carried out at the client's premises.

            You should only accept that substantive duties are carried out at home where the company has a trade or business that goes beyond servicing individual client contracts and where that additional trade or business is serviced from home. For example a computer consultant may service individual client contracts that involve installing software but may also design, develop and market software from home as part of the company's business. That additional activity may be part of the substantive duties of the employment.
            So I am saying that my work from home is "substantive"...

            Simple no?

            Comment


              #56
              Hours in a week: 168
              Time used for "substantive" work at home: 20
              12% of time
              25% of floor space
              12% x 25% = 3%

              Interest only repayments £600 a month
              3% x 600 = £18 (£4.2 per week)

              Does this calculation seem correct?

              Comment


                #57
                Originally posted by lithium147 View Post
                I am going on what Sally@InTouch posted:


                So I am saying that my work from home is "substantive"...

                Simple no?
                And I would argue it isn't your main revenue steam, carried out on an adhoc bases out of normal working hours on a freelance basis so it isn't but that decision is up to you based on you knowing what you do.

                Let me ask you another question... Have you actually worked out the cost (realistically) of this and the actual savings to you bearing in mind this is a portion of the morgage interest. Is it even financially viable which would give some guide to how much risk to chase?
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #58
                  Originally posted by lithium147 View Post
                  Hours in a week: 168
                  Time used for "substantive" work at home: 20
                  12% of time
                  25% of floor space
                  12% x 25% = 3%

                  Interest only repayments £600 a month
                  3% x 600 = £18 (£4.2 per week)

                  Does this calculation seem correct?
                  So let me get this right...you want to go to all this effort, to claim an extra 20p a week (versus the standard "no records required" rate of £4pw)...???????

                  Comment


                    #59
                    Originally posted by lithium147 View Post
                    Hours in a week: 168
                    Time used for "substantive" work at home: 20
                    12% of time
                    25% of floor space
                    12% x 25% = 3%

                    Interest only repayments £600 a month
                    3% x 600 = £18 (£4.2 per week)

                    Does this calculation seem correct?


                    Yep that looks right... go for it!!!

                    P.s. Your office takes up a quarter of your flat???
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment


                      #60
                      Originally posted by northernladuk View Post
                      But this is your situation which is pretty different to the majority. In your case (which we weren't discussing when Sally posted the link) I would say you don't fall in to the catagory mentioned as it does mention some assumptions which you do not meet so is a non issue. For the other 99% of contractors who do meet these assumptions it is pretty black and white no?
                      I definitely appreciate my situation is a bit atypical, but which assumptions don't I meet? I got lost when they used a word like "substantive" which I never even knew was a word!

                      Is the issue with being a PSC, or is the issue whether you properly WFH rather than use it to do your invoices? I cannot even find the page which offers the floorspace % calculation now to try and figure this out!
                      Originally posted by MaryPoppins
                      I'd still not breastfeed a nazi
                      Originally posted by vetran
                      Urine is quite nourishing

                      Comment

                      Working...
                      X