There is no current rate for self employed. The current rate for employees is £4 per week, but this is often used by self employed too lazy to work out the actual figures. It's often best to do the calculation, you will get a far more accurate handle on your cost and will probably work out better off.
As long as you do work at home you can claim use of home as office. The calculation takes into account the amount of space you use and how often.
(Why do I sound like Dennis Watts off Eastenders when I write that )
What I normally do is a journal at year end to DR Use of Home, and CR Capital Introduced.
You will have to create an Expense account for Use of Home, and also a capital introduced account if it is a soletrader, or a directors loan Account if it is LTD company
Edit: forgot to say that the latter go in to the Equity ledger in QB
HTH
Bill
-- Edited by Wella on Sunday 10th of June 2012 05:46:17 PM
Could I add a question to this and ask how you account for it. I'm using quickbooks and would use the £4 a month but as I don't actually outlay any money which accounts would I use to account for it? Thanks.
I don't use QB so won't try to guess the best allocation for that software.
Just wanted to say that's £4 per week, not per month. so basically £208 per annum.
Also note that in the last tax year it was £3 per week.
Shaun.
__________________
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.
Could I add a question to this and ask how you account for it. I'm using quickbooks and would use the £4 a month but as I don't actually outlay any money which accounts would I use to account for it? Thanks.
Dr Use of home £4.00
Cr Capital introduced £4.00
__________________
Never buy black socks from a normal shop. They shaft you every time.
With a sole-trader, I would take a short-cut CR Drawings and DR Use of Home on the logic that ultimately, Drawings finance the home. HMIT find Capital Introduced a difficult concept without a lot of questions and it's best not to trouble them with it. Witness inspections where all deposits are deemed to be sales.
Thanks very much. I did realise it was £4 a week, I just have a mushy brain at the moment. I have an AAT Financial Statements exam next week and have my head full if IASs, ratios and cashflow statements.
)
