How to work out expenses for mortgage?

[northernladuk]

Can we get a few people to do the sums before they get upset about this. As we can see from lithiums hilarious example... it may not even be worth worthing about....

[Sally@InTouch]

I will give you some more sleepless nights if you want

...nah! You just keep me chuckling through the day

[northernladuk]

...nah! You just keep me chuckling through the day

Story of my life that is....

[Jessica@WhiteFieldTax]

Wow, this thread is getting long! Until I found the link I posted which I just 'happened' upon by accident as HMRC website is chaotic, when I was researching for the article I wrote. I still thought that rent etc, a proportion of, was allowable (the old rules). I think HMRC sneaked the rules in without telling anyone. Many accountants are probably still not aware. Yet another HMRC dig at PSC's?

I think, but would be corrected, that the BIM manuals only refer to Schedule D (oldspeak).

For Schedule E, its the EIM range? Eg EIM32810 et seq

Guess the company could deduct under Schedule D, but that would create a profit in the home-owners name. At which point my brain freezes.

BIM45745 must be quite out of date in so far as it refers to MIRAS

You're right though: its chaotic.

[d000hg]

Can we get a few people to do the sums before they get upset about this. As we can see from lithiums hilarious example... it may not even be worth worthing about....

For me, I pay £650pcm on rent, £150 on CT, £150-ish on other bills for utilities, etc. Call it a grand.
I work 95% from home and have one room set aside as an office in a 3-bedroom house. Depending how you do floorspace, it's at least 10%. So that should mean £100/month is not even a particularly cautious figure to claim, IF the rules allow it. I'd consider that worth claiming.

[northernladuk]

For me, I pay £650pcm on rent, £150 on CT, £150-ish on other bills for utilities, etc. Call it a grand.
I work 95% from home and have one room set aside as an office in a 3-bedroom house. Depending how you do floorspace, it's at least 10%. So that should mean £100/month is not even a particularly cautious figure to claim, IF the rules allow it. I'd consider that worth claiming.

For that amount of time at home and that money I wouldn't see it as unreasonable amount to claim either to be honest. Have you thought about getting your accountant to do the actuals for you? For 95% home working I would be inclined to be as generous as is allowed I guess

[lithium147]

Does the £4 per week just cover rent/mortgage, or does it cover other thing like:

• council tax £100pm
• service charges £150pm
• electric £25pm
• home insurance 30pm
• internet £15pm
• thames water £30pm

total 350
3% of 350 = 10.5 (2.4 pw)
in addition to interest on mortgage:
3% x 600 = £18 (£4.2 per week)

3% x 950 = £28.5 (£6.6 per week)

does that sound reasonable?

[SueEllen]

Does the £4 per week just cover rent/mortgage, or does it cover other thing like:

• council tax £100pm
• service charges £150pm
• electric £25pm
• home insurance 30pm
• internet £15pm
• thames water £30pm

total 350
3% of 350 = 10.5 (2.4 pw)
in addition to interest on mortgage:
3% x 600 = £18 (£4.2 per week)

3% x 950 = £28.5 (£6.6 per week)

does that sound reasonable?

The £4 covers everything. The idea is unless you are working from home a significant amount of time then it should cover your costs as you have to pay for things anyway.

You are going to have to prove if investigated you have been reasonable so you need to keep all bills.

BTW with your home insurance does the policy specifically include the business contents for non-clerical work?

Your service charges will cover the buildings insurance but unless you can prove the extra for the contents is due to the business contents then you can't claim it.

Lots of insurance policies don't cover non-clerical work from home. You can get around it by just having a policy for your business contents which you can buy bundled in with your other business insurances. If however your home contents policy does cover you then you can claim the proven difference between not having it yearly. So if the difference is £50 a year you claim that rather than the 3% of £30 a month.

In other words its a fixed cost that should not be included in these calculations.

[lithium147]

In this example:

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.

£240 = £4.6 per week.
So this is more than the £4 per week. Therefore, its ok to go over the £4 per week it seems.

[captainham]

In this example:


£240 = £4.6 per week.
So this is more than the £4 per week. Therefore, its ok to go over the £4 per week it seems.

As SueEllen says, you will need to keep detailed records in order to claim (in this case) the extra 60p a week, so I would question if it's worth it.

Plus, I don't recall if you have stated if you are a PSC or not? If so, then this is all irrelevant as per Sally's link several pages back, as that sets out very clearly what you can/can't claim (utilities only).