I've recently taken on a 70yr old gentleman who buys/sells/raises sheep and cattle. He has voluntarily registered for vat. He seems to want to claim the vat back on his home water & electricity bills, I know he can't claim back the whole lot but can he claim a % of them as use of home as office? He also thinks he can claim the vat back on his new boiler but surely he can't? what about repairs to his home?
Many thanks in advance
These expenses are not incurred wholly, necessarily and exclusively in the pursuit of business therefore not allowable.
Reasonable expenses related to the office apportionment of the business would be permitted. Floorspace may be a good way of calculating the apportionment (assuming that we are talking about a dedicated office here rather than a table at the back of the living room).
See this BIM on use of home as office : http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm
Also, use of home as office got cover in these threads (amongst others) :
Might be worth taking a read through this document on the Agriculture flat rate scheme before allowing your client to go down as the claim as you go route which may prove a more expensive option (don't know the figures so can't advise).
Note that there may be some overrides specific to the farming community in relation to the use of home as office so fingers crossed someone more knowledgable of agricultural clients will be able to offer some additional pointers for you.
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.
If using a round figure, most people use £3 a week, and no there isn't any VAT. As Shaun says farmers accounts are pretty different to your average trader so it's worth looking into in more depth before making any decisions.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
Use of home when it comes to farming is different, as there is a necessity to live "on site" to tend to livestock and crops. Farming as a trade is defined by statute, unlike most other trades (something like "The occupation of land for husbandry")
Most farmers seem to claim 2:1 business: private useage for the revenue expenses of the house, and VAT is proportional on that too. However I recently read in one of the manuals (can't think which one right now) that inspectors should not take that as a given, and it should be calculated like any other shared asset.
If memory serves, repairs and improvements to the farmhouse can be fully expensed, or capitalised as it is an asset of the business, provided to the farmer to enable him to do his job.
It would require a further read up to confirm the above. BIM55260 covers a small bit of the above.
I just knew that when I said someone with a bit more knowledge on agricultural businesses would clarify matters that it would be you!
Cheers for the link matey. I hadn't thought of searching the HMRC archives based on tied cottages. (doh!).
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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.
Only started reading into it as I have one client who is a farmer, and I have to keep checking what he can and can't claim for (he is a friend of mine, and does try it on)
Thought it might also be useful, as this is a very agricultral area (we don't just entertain visitors you know) and I might pick up a few farming clients.
Suppose in that vein I should look at the pitfalls ('scuse the pun) of mining, as the price of tin and copper have rocketed, and there is serious efforts to reopen some of the redundant mines again.
deleted your other post (and mine) in the tidy up after the advertising in the signature. Thankfully deleting it hasn't dropped you down to Guru again.
Not sure if it's when you hit Expert or when you hit 2000 posts that you get the fun of being able to clear these things up yourself.... There's a documentation overhead with everyone you ban and every post you delete so don't know whether you want this power anyway!
On the mines point that reminds me of when we wrote the community charge package for IBM. There was a clause in there that if you had even one share in a cornish tin mine (sure it was tin or copper, sorry, it was a long time ago) then you were exempt from community charge due to some law going back to the 16th century!
That really wasn't one that the government publicised but non the less lots of people bought shares and were indeed exempt from the dreaded community charge.
Side effect was that shares went up in businesses that were not actually producing anything... You just couldn't make this stuff up could you!
Congratulations on the site promotion matey... You were always the expert anyway!
All the best,
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.
Just to throw a spanner in the works he doesn't have his own farm he just rents about 3 or 4 different fields to raise the cattle and sheep on. He is trying to claim the vat back on his garage door repairs as he keeps the animals drugs in there, not allowed though is it? Must be something about farmers & trying it on!
Having been bought up on farms, I can safely say farmers are a canny lot, and will always try it on
Being a tenant farmer, with no agricultural tie will change the position on what household expenses he can claim, and I would suggest the usual £3/ week for use of home for admin work. The garage door is a repair to his own property, and he is most likely to receive the benefit. Maybe he could buy a seperate security cupboard, or safe for the drugs, if he is that concerned about the drugs.
There are many querky laws that relate to tin mining in Cornwall, many of which have not been revoked, just never invoked.
The most important law down here though, is, never put carrots in a pasty
Haha coming from a vegetarian you can't beat a nice cheese and onion pasty mmm thanks Bill will try and make him understand about what he can't claim. He actually keeps the drugs in a fridge in his garage!! As we say here in Suffolk "it's a rum owd dew"
-- Edited by Pickle on Friday 30th of September 2011 12:44:22 PM
(he is a friend of mine, and does try it on)
thanks Bill will try and make him understand about what he can't claim. He actually keeps the drugs in a fridge in his garage!! As we say here in Suffolk "it's a rum owd dew" 
