Reply to: How to work out expenses for mortgage?

[cojak]

STOP IT!

He won't but I will. This thread is going nowhere and the OP is verging on the Trolling side of things.

Consider this thread locked.

[SueEllen]

You actually save 40% if your a higher income earner..

STOP IT!

[lithium147]

You actually save 40% if your a higher income earner..

[Sally@InTouch]

I am sitting here banging my head on the table lol. I have never seen such a moronic constant argument to such a ridiculous situation.

You are pushing and pushing and pushing, against all the advice, moving from totally safe situation to a potential minefield for how much???? £2.60 a ******* week????? And remember this is only reducing your tax liabilty by this much.... You are not actually making this much.

Seriously... If you have a mobile phone in the company name paid by the company name it will take you less effort to threaten the company to leave and get £2.60 a week off your bill than all this crap.

Am calling Troll. No one can be this stupid.

It's a whopping £27 corporation tax saving over the year...

[northernladuk]

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?

I am sitting here banging my head on the table lol. I have never seen such a moronic constant argument to such a ridiculous situation.

You are pushing and pushing and pushing, against all the advice, moving from totally safe situation to a potential minefield for how much???? £2.60 a ******* week????? And remember this is only reducing your tax liabilty by this much.... You are not actually making this much.

Seriously... If you have a mobile phone in the company name paid by the company name it will take you less effort to threaten the company to leave and get £2.60 a week off your bill than all this crap.

Am calling Troll. No one can be this stupid.

[SueEllen]

And again you dodge the PSC question, which implies you are one so this is all irrelevant.

As I stated on page 2, you were always going to ignore the advice received, whether from seasoned contractors (I do not include myself in that) or from actual bona fide accountants (and I think we all know I'm not one of those), and just go ahead and do what you wanted anyway, so you go ahead and keep your records and best of luck if HMRC ever comes knocking.

It doesn't get much clearer from HMRC that you shouldn't be doing this, but it's your business after all so you go right ahead.

The HMRC pages and advice are actually a mess.

However the effort he's going into to claim extra for the 3% of the time he works from home is amusing. There are easier ways of claiming extra expenses which cover you working from home which contractors have been doing this legitimately for years.

[SueEllen]

Thx SueEllen, good to receive some useful info..
Actually, I dont have home insurance yet, just moved in so it was an estimate.
Good to know about this now. What do you mean by other business insurances? The only other business insurance I have is professional indemnity.

Depending on your insurance provider/broker you can bundle your insurances to include business contents.

I needed to do this when I worked away in Europe to ensure I was fully covered however the policy actually covers the home office as well for actually computer work. (I have clients where I have needed public liability insurance when working from their offices as well so the bundling)

If you do need home contents get two written quotes from the same source with your business included and excluded and claim the difference after confirming with your accountant you are allowed to.

[captainham]

I am keeping detailed records anyway, so no matter..

And again you dodge the PSC question, which implies you are one so this is all irrelevant.

As I stated on page 2, you were always going to ignore the advice received, whether from seasoned contractors (I do not include myself in that) or from actual bona fide accountants (and I think we all know I'm not one of those), and just go ahead and do what you wanted anyway, so you go ahead and keep your records and best of luck if HMRC ever comes knocking.

It doesn't get much clearer from HMRC that you shouldn't be doing this, but it's your business after all so you go right ahead.

[lithium147]

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).

I am keeping detailed records anyway, so no matter..

[SueEllen]

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.

You really don't listen.

You can go over the £4 a week but you have to prove your costs are reasonable.

In your last calculation you included something which is a fixed annual cost to your business which shouldn't be included. (In other words you will be claiming slightly more in your expenses annually if you do it properly) If a HMRC inspector got their bee in a bonnet and decided to pick on something randomly* they would use it to show your costs aren't reasonable.

* We know they aren't bright so we presume in this case you got the inspector who also lives in a flat.

[lithium147]

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.

Thx SueEllen, good to receive some useful info..
Actually, I dont have home insurance yet, just moved in so it was an estimate.
Good to know about this now. What do you mean by other business insurances? The only other business insurance I have is professional indemnity.

[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).

[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.

[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]

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?