Reply to: Paying accountancy fees upfront - VAT implications?

[SueEllen]

In my case probably 90% from home. However, because I am renting I don't imagine I would be able to 'sublet' the office space to my Ltd.

Then you can claim a proportion of your bills - gas and electricity -relevant to the size and use of the room.

Though if your heating system is efficient the £4 is enough.

If you Google you can find the relevant HMRC manual with the calculation.

[Rafd]

With the home office thing it depends on how much of your time is actually spent working at home. Most contractors on here work from client sites most of the time so the easiest is to claim the £4 a week.

In my case probably 90% from home. However, because I am renting I don't imagine I would be able to 'sublet' the office space to my Ltd.

[SueEllen]

With the home office thing it depends on how much of your time is actually spent working at home. Most contractors on here work from client sites most of the time so the easiest is to claim the £4 a week.

[TheFaQQer]

Apparently, the important part here is the "tax point" of the transaction as the invoice date is not always the same.

https://www.gov.uk/vat-record-keepin...y-or-tax-point

Can't remember where I read that though.

[northernladuk]

How about next time you ask a question don't get off the phone until they explain why they say that. If you d9nt agree research the reason until you are satisfied .

This will have three outcomes. You have your answer, you've learnt something and you know which accountant you trust.

Just asking a question and the leaving with yes or a no but being as clueless as before you picked up the phone isn't smart.

[Dan @ SG Accounting]

Got some spare time on my hands and 10 mins of looking into this could save me £200 so seems good value.

As a follow up question I have also had directly conflicting advice on a couple of other points:

a) I will work from an office in my rented flat. One accountant said a portion of the rent is an allowable expense, the other said no, only a portion of the bills is allowed.

b) Allocation of some shares to my partner (not married) is ok if she has an interest in the company e.g. she does the book keeping. One said yes, one said no.

So much for the "ask your accountant" response so often given here!

a) There is actually quite a lot on use of home as office claims in the HMRC manuals. HMRC guidance shows a few examples of apportionment of fixed costs (mortgage interest is included but I would extend this to mean rent also). With a reasonable estimate being accepted without enquiry. My advice is to back up any claim with a calculation and keep on record. The alternative is to claim the HMRC approved fixed rate amounts.

b) Without knowing the full story here it's hard to advise however anyone can own a share in a company and receive dividends. Some issues to consider are has investment been made into the company? Has there been a gift (a spouse would have exemption under the outright gift clause)? What rights are attached to the shares?

[MrMarkyMark]

I'd personally be wary of giving the shares to someone who I wasn't married to.

Whoooooooooooosh, loves young dream has just left the building

[TheFaQQer]

b) Allocation of some shares to my partner (not married) is ok if she has an interest in the company e.g. she does the book keeping. One said yes, one said no.

I'd personally be wary of giving the shares to someone who I wasn't married to.

Firstly, the settlements legislation.

Secondly, I wouldn't want to give shares in my company to someone I wasn't married to. If you're married and divorce, then the partner may have a claim to part of the business. If you're not married and split up, they won't. So apart from a tax benefit in getting more money out of the company that way, why would you do it?

For me, just doing the bookkeeping isn't enough of an interest in the business to justify being a shareholder. If the partner was contracting part time through the business then that might be a different matter. And you could sell your partner a share in the business - that would be fine (see TCP as an example).

That all said, chances of an investigation are low.

[stek]

Got some spare time on my hands and 10 mins of looking into this could save me £200 so seems good value.

As a follow up question I have also had directly conflicting advice on a couple of other points:

a) I will work from an office in my rented flat. One accountant said a portion of the rent is an allowable expense, the other said no, only a portion of the bills is allowed.

b) Allocation of some shares to my partner (not married) is ok if she has an interest in the company e.g. she does the book keeping. One said yes, one said no.

So much for the "ask your accountant" response so often given here!

a) no

b) no

Should really be 'ask your specialist contractor accountant' or 'research the HMRC cases in great wrt to contractors and after a few months study form your own opinion and engage Joe Accountant'

NW, SJD et al exist and do well for a reason.....

[Dan @ SG Accounting]

Hi Rafd

The important part here is the "tax point" of the transaction as the invoice date is not always the same.

https://www.gov.uk/vat-record-keepin...y-or-tax-point

Dan

[Rafd]

Looks like it is taking a lot longer than 10 minutes.

Your company will save £200, not you.
As others have said, get on with something more important instead.

Like posting on contractoruk?

Besides - this is more about helping me choose the most reliable of the two so an important decision.

[Rafd]

Both accountants are used by people on here I think and appear to specialise in contractors.

Accountant A says no to upfront invoice, yes to partner shares, no to home office. Accountant B says yes to upfront invoice no to partner shares, yes to home office. So mixed up responses with regard to risk.

[MrMarkyMark]

Got some spare time on my hands and 10 mins of looking into this could save me £200 so seems good value.

Looks like it is taking a lot longer than 10 minutes.

Your company will save £200, not you.
As others have said, get on with something more important instead.

[northernladuk]

Are these the same two accountants? Are they both big names in the contractor field? Is it the same one that says yes to everything I.e. has a much lower risk threshold than the other.

[Rafd]

re the use of home as office: Contractors’ Questions: How much to claim for my home-based office? :: Contractor UK

It does say there are two schools of thought. Sounds like a bit of a grey area which would 'probably' be fine.