I work 30-40 hours a week from home - desk in the sitting room. How much can I claim as use of home allowance? I have been putting in £10.00 a week but I don't think that that is anywhere near enough. It's a house with 2 bedrooms, sitting room, kitchen and bathroom if that makes any difference.
Every time I look up how to work it properly it gets a bit complicated.
How does everyone else work out their use of home allowance?
Generally £520 per year for a desk in the living room would be considered a bit much.
The official figures based on the hours that your working are actually £4 per week.
The simplified rules actually state £18 pcm for the hours that your doing which comes out slightly better at £216 p.a. rather than £208
The alternative approach is based on the amount of floor space that you are utilising specifically for the business which from the sound of it is a desk in a communal room.
For the latter method you would add up your costs (including interest but not capital on your mortgage) divide by the total floor area of the house and then multiply by the amount being used wholly for business purposes.
So, imagine that your mortgage interest, telephone, heating, electricity, gas, internet use and council tax in total come to (say) £6000 per year and your house in total is 818 square feet (UK average) you use 20% of one floor for business only then that would be £6000 / 818 * 83 = £609
However, to use that method you would need to keep detailed records of the household expenditure to which the claim related and measure the floor area exactly
The higher the household expenditure and larger the necessarily dedicated work area as a percentage of the total floor area the more appealing the use of floor area as the calculation becomes but if this method is adopted an HMRC inspector will be keen disprove the figures as that one's generally an easy win for them where claims within the government figures of £216 p.a. will not (generally) be challenged (if you can show that you are working the required number of hours for that level of claim).
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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.
Wouldn't you also need to work out the percentage of time that floor space is being used, if you are doing that? It's not being used 24/7 so they can only claim for the 30-40 hours they are actually using it for business.
My understanding is hours are the fraction of use (say 12 hours a day) where it is being used solely for business (say 6).
Only make reasonable claims and consider attaching your computation to the Return upon submission. I was supplied with a small figure for mortgage interest once where it turned out to be solely for an extension so didn't claim any.
Start with a column for the expenses listed here. Next columns for total amounts in period and for Area % added back (3/4qtrs) & sole use hours (6/12ths).
Neither bathrooms nor kitchens are counted as living spaces. This comes from the method of counting living spaces on the Census, and should be possible to confirm.
My understanding is that generally, if you have guests over you might utilise any space for a bed with those two exceptions :)
Also, breakfasting kitchens - ie where kitchen and dining room are run into one count as one space, and through lounges where the lounge and dining room are merged count as two. Should you have a property where such adaptations have been made.
I think that your going with the method where you count the number of rooms which is different to the total floor space calculation approach.
Hi Tim,
If the area of the house is used only for work isn't it immaterial whether or not you are using it. For example a dedicated workspace that is no use for any other purpose is still consuming a portion of the house whether or not it is in use so I would not attribute the time based on work hours unless the work area could be utilised for other purposes.
Hi Sam,
see above.
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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.
I'm not sure my brain is working this week - the specialists have added another couple of long term issues to Hazels list - I now have to completely reorganise how I plan all the meals, not to mention first work out what she is and is not allowed to eat!
I think that your going with the method where you count the number of rooms which is different to the total floor space calculation approach.
Hi peeps. It's a bit lackadaisical of me to use No. of rooms. Part of the difficulty is getting the square foot figure from the client. You're dead right but in the absence of a floorspace figure, less kitchens (thank you Theresa), bathrooms and halls I'd want to know that the client isn't working in a broom cupboard.
Indeed, if you take this to it's logical conclusion, an Inspector could challenge the claim on a lounge and say for example. 'Ahhh but you're only working under the stairs'. TBH I don't know how to answer. Above all reasonableness should hold sway where one's own situation may have other features.
Hi Tim,
If the area of the house is used only for work isn't it immaterial whether or not you are using it. For example a dedicated workspace that is no use for any other purpose is still consuming a portion of the house whether or not it is in use so I would not attribute the time based on work hours unless the work area could be utilised for other purposes.
Hi Shaun.
Dividing a gas bill by 12 hours still takes the whole of the bill as the total even when everyone is asleep in bed. So my 6/12ths is just a way of removing dual use time rather than erasing bed time fixed costs. The example given for Electricity on HMRC is that of a commercial photographer and supposing one has a large fish tank which consumes electricity day and night, then allow for that.
My train of thought here was Rachel's sitting room. Dedicated Room is one complication she may not have but if she creates a column for it somewhere off screen to the right (next to 'CGT' LOL) then she'll know she's ruled that out in her own presentation.
Rachel, another worry, you can probably forget are Business Rates. That's only likely if you were to alter the frontage, have people trooping in and out like a sweet shop and have the neighbour's complaining.
Good thread folks.
Tim
Hi Sam,
see above.
-- Edited by Don Tax on Friday 21st of November 2014 08:50:02 AM
