I do the books for a beauty therapist who works from home and she has made one of her bedrooms into her treatment room. This room could not be used as anything else now but the changes would not effect the house if the property was sold, it would just revert back to a bedroom.
So, how and what costs would I allocate for using this room
This may be of some help: http://www.kmbookkeeping.co.uk/guide-home-office.php
Total Allowable house hold costs / number of rooms (excluding bathrooms, toilets and halls), and as it is used only as a therapy room there is not time calculation required.
This obviously will have CGT implications when the house is ever sold.
Kris
-- Edited by kjmcculloch on Wednesday 27th of October 2010 09:49:22 AM
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
be careful what costs you allocate as use of home as office etc, should you have an investigation this could have an impact on home / business rates and your PPR relief when you come to sell your home.
There was a thread on use of home as office which diverged into PPR relief and CGT on home sale. I think it was about a week ago should you wish to look at it.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
Beware of the CGT if you go down this route - it will become a nightmare. I would suggest use of home allowance, as to be honest, there is not much cost in a beauty room at home, apart from the rent aspect, but is it worth the hassle.
It does also depend on the turnover levels and profit, as it would be good to reduce the profit but again, you need to think about the CGT implications.
In my opinion apportioning costs is the only way to tackle this. The benefits will normally far outweigh the costs. Remember with the current personal annual allowance for CGT the ROOM, not the house, but the room would need to go up in value by more than £10,100. So if you have 6 rooms then the house would need to increase by £60,600 before you need to pay CGT.
Personally, I would happily pay CGT on this as it would mean I had made a whole packet more.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
The views expressed in this post are my own personal (HRA protected) views, and are not representative of any organisation I have any involvement with.
