best way to charge LTD for office fees

[BolshieBastard]

just wondering does anyone have thoughts about the charging of office and service fees to your LTD company for office space.

lets work on the basis that you use 1 of 4 bedrooms in your apartment, wholey and exclusively for the LTD company offices:

can you charge 1/4 of the mortgage (interest and capital)?
1/4 of the power and heat bills?
1/4 of the council tax?

or can you give the company a bill for the total service?

but leaves an interesting question of how do you bill the company - write out a invoice from a person, and is the person then liable to person tax?

thanks for reading

Oh FFS.

[jamesbrown]

You can do one of three things:

a) Claim £4/week no questions asked.
b) Claim your *additional* costs. You cannot claim a proportion of your existing fixed costs. You can claim your additional utility costs if you can provide evidence/calculations. This may or may not be worth doing versus £4/week. You can't claim a proportion of your phone/broadband either - these need to be in the company name. You could fully expense a separate broadband or phone line if the contract is in YourCo's name.
c) Set up a rental agreement between you and YourCo and charge it rent, anywhere up to a fair market rate. This would need to be declared as rental income on your self assessment and you can then claim a reasonable proportion of your fixed costs (mortgage interest, utilities etc.) as rental expenses - if you charge rent to YourCo that is equal to your claimable costs you should make no profit from the rent and should have no additional tax to pay.

Obviously, option c) has the potential to recover more costs but there's more involved with it and you should discuss the pros and cons of this approach with your accountant. b) is unlikely to be much more than a) and you'll probably find most people take approach a) as its simple and hassle free.

If you do a search on here you'll find numerous threads covering all three of the above approaches.

Agree with the above, but I have a few minor additions. First, it's slightly better to claim 18pm than 4pw (18*12>4*52) Second, having looked into this in some detail, it's very difficult to correctly apportion the allowed costs by time and area and produce a figure that is greater than 18*12, even when working from home 100% of the time. It's even more difficult to produce a figure that justifies the effort. Basically, it's a non-starter unless, perhaps, you live in a property with a very odd configuration . Finally, one needs to be careful to avoid other complications from allocating/adapting a space that is purely for business use (CGT on sale and, perhaps less likely, business rates).

[northernladuk]

Just do option A) as per TCP's advice and forget trying to rip your company off.

[TheCyclingProgrammer]

You can do one of three things:

a) Claim £4/week no questions asked.
b) Claim your *additional* costs. You cannot claim a proportion of your existing fixed costs. You can claim your additional utility costs if you can provide evidence/calculations. This may or may not be worth doing versus £4/week. You can't claim a proportion of your phone/broadband either - these need to be in the company name. You could fully expense a separate broadband or phone line if the contract is in YourCo's name.
c) Set up a rental agreement between you and YourCo and charge it rent, anywhere up to a fair market rate. This would need to be declared as rental income on your self assessment and you can then claim a reasonable proportion of your fixed costs (mortgage interest, utilities etc.) as rental expenses - if you charge rent to YourCo that is equal to your claimable costs you should make no profit from the rent and should have no additional tax to pay.

Obviously, option c) has the potential to recover more costs but there's more involved with it and you should discuss the pros and cons of this approach with your accountant. b) is unlikely to be much more than a) and you'll probably find most people take approach a) as its simple and hassle free.

If you do a search on here you'll find numerous threads covering all three of the above approaches.

[TheCoconutDog]

just wondering does anyone have thoughts about the charging of office and service fees to your LTD company for office space.

lets work on the basis that you use 1 of 4 bedrooms in your apartment, wholey and exclusively for the LTD company offices:

can you charge 1/4 of the mortgage (interest and capital)?
1/4 of the power and heat bills?
1/4 of the council tax?

or can you give the company a bill for the total service?

but leaves an interesting question of how do you bill the company - write out a invoice from a person, and is the person then liable to person tax?

thanks for reading

Dream on. https://www.gov.uk/tax-relief-for-em...orking-at-home

[TykeMerc]

just wondering does anyone have thoughts about the charging of office and service fees to your LTD company for office space.

lets work on the basis that you use 1 of 4 bedrooms in your apartment, wholey and exclusively for the LTD company offices:

can you charge 1/4 of the mortgage (interest and capital)?
1/4 of the power and heat bills?
1/4 of the council tax?

or can you give the company a bill for the total service?

but leaves an interesting question of how do you bill the company - write out a invoice from a person, and is the person then liable to person tax?

thanks for reading

There's a commonly used amount for home as an office that the accountants recommend, that's an acceptable amount to HMRC.

It was £216 for 2014.

You can rent a commercial office space for the full costs of course, but don't expect to offset lumps of your home costs for what you describe.

[karlc]

just wondering does anyone have thoughts about the charging of office and service fees to your LTD company for office space.

lets work on the basis that you use 1 of 4 bedrooms in your apartment, wholey and exclusively for the LTD company offices:

can you charge 1/4 of the mortgage (interest and capital)?
1/4 of the power and heat bills?
1/4 of the council tax?

or can you give the company a bill for the total service?

but leaves an interesting question of how do you bill the company - write out a invoice from a person, and is the person then liable to person tax?

thanks for reading