Hi Everyone, I have a question, would like to run it by you experts before i carry on.. i think i know what i should do. I have this new client, sole trader, single guy with a couple of kids. I have been entering his details into quick books and doing fine until i started looking through his bank account in more details. He is running his business bank account as his personal account, i know lot of his details will go down as drawings, things like payment to his children. He had a loan, which has nothing to do with the business going through the account and he also collects working tax credits that go through his business accounts along with.... rent, tv license, electricity, bt phone. My client uses his home as an office, hence why everything is going through the business bank account. Would someone be able to explain to be the process of using his home as an office, as i know you have to prove that he is using his home as an office and i know that you can only claim for so much when doing this. I think i might be alittle confused....which doesn't take much.
sorry I'm sure that I'm being stupid but I'm unsure which part the question is?
Sounds as though your on top of the piggy bank situation (put it to drawings).
Going forward try to get the client to transfer the money to his private account and make payments from there.
Use of home as office should be proportional to income and reasonable. Over on taxation web they advise that tax inspectors don't normally question charging around £5 to £6 per week for use of home as office so around the £260 p.a. is probably reasonable.
Have a read of this thread and make your own mind up though about what you would consider reasonable http://www.taxationweb.co.uk/forum/tax-enquiry-home-use-as-office-t8035.html
Sure that there were more questions in there but you may have to rephrase it a little for my addled old brain.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thank you Shamus & Little bookkeeper, I will have a look at the websites you both suggested. I have spoken to my client and he is going to stop using his business account as a personal one and he is also changing all his DD out of there as well. thank you soo much again, Chrissy
