I'm doing my first tax return, mine, not a clients and I'm a little confused what I can deduct from my income for use of my home.
I know I can deduct portions of my council tax and mortgage interest, but how do I calculate it?
I work in a spare bedroom dedicated to my bookeeping in the evening and my husbands job in the day (he's not self employed, but an employee working from home).
So, first I worked out how much council tax I pay on that one room (based on 7 rooms in the house) per hour and multiplied that by the number of hours I have worked - £11 - wayhay!
But all the stuff I'm reading on the internet says apportion on the basis of the proportion of the property used - that would simply be one seveneth of my council tax for the period, knock of half because my husband uses the room too - £110 - a much nicer figure. But would half be enough, my husband does an 8 hour day, I do on average 4, should I knock off two thirds - do HMRC reallly care for a couple hundred quid?
Also, it is a much smaller room than all the others, you know the one, the third 'bedroom'!
What do other people do? Sorry if this an obvious question, I've not come across this is work beore and haven't studied tax for a few years.
example 2 seems to me to be applicable in your case and you should perhaps consider the percentage of floor space as a good indication as to the percentage of allowable expenses for using your home as an office.
Personally I don't think that just saying you use one of seven rooms therefore one seventh is the right approach as I'm sure that not all rooms are exactly the same size.
As I say, have a read of the examples and we'll chat again tomorrow.
Hope that this helps,
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.
well, learn something new everyday. I didn't think that number of rooms was considered as an acceptable division.
The reasoning behind my assumption was down mainly to utility bills. i.e heating a room that is 9 * 6 will not be the same as heating a room that is 24 * 12.
Also water rates are worked on floor (or more to the point roof) space for the sewage part.
To me % of floor area still seems the fairest apportionment of costs and the one HMRC are least likely to question but as always I'm always open to being corrected in my assumptions.
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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.
Or for that matter that half of their assets that are still being depreciated through the books were actually sold on Ebay quite some time back.
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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.
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.
Cheers for that Shaun, I hadn't seen that page on the HMRC website, even though I'd been looking at it for ages, I think I got a bit lost, link after link, after link. I agree with you re option 2, that's the one I'm going for, and I checked with HMRC themselves, they said work it out and knock half off for my husband.
