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Post Info TOPIC: business use of home
lor


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business use of home
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Hi All
I understand that if you use your home for work you are able to claim £3.00 a week, what haapens if you use your home for example one day a week for business, I guess you would be able to claim £3/5 for each day a week you spend at home working??????

Also e.g. you were claiming £3 per week for use of home for business, you would then post as follows???

Dr £3X52 = £156 Expenses (Heating and Light)
Cr £156 bank ac

please correct me if I am wrong, then this would mean that you would need to pay the money from your business ac to your personal ac, is this right?????(so in effect the business paying back, yourself personally, for the use of the home) 


sorry I haven't dealt with this type of transaction before.


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R2s


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Hi Lor,

I have set up an expense account called 'Use of Home as Office' and do the transaction between that account and the 'Drawings'. (I know some people use the 'Capital introduced' account instead of the 'Drawings'; I believe either is ok).

You can just do the £3/pw amount or a % of the area used by the time used. I guess if you worked alot of hours at home you may feel that £3/pw doesn't cover it.

You can take into account phone / line rental costs, broadband & phone calls as well based on business use. Also mortgage interest can be included.

HMRC have got several examples of what's allowed and how to work it out on their website; I found that to be very helpful.

regards
Rachel.

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Rachel

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lor


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Thank you Rachel, do you put this through the accounts on a regular basis or do you do a journal at year end to account for this?

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R2s


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Hi Lor,

Personally at year end; it's just one transaction rather than 12 or 52.

Also if you're working it out by the % method you won't know the true figure until the year end anyway; especially as some bills maybe monthly, others quarterly and your mortgage statement yearly.
I keep a seperate log as and when the bills etc come in and at the end of the year I have my figure to put through the accounts.

But like lots of things it's down to personal preference how you work it.

regards,
Rachel.



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Rachel

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Ade


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Hi Lor

I can't find any mention of a fixed £3 amount on the HMRC website - where did you find out about it?

Cheers

Ade

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R2s


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Hi Ade,

The £3/pw is the figure the HMRC gives for 'employees' working from home so I'm not entirely sure it was ment for self-employed people although I know a few who do use this figure.
That is why personally I prefer to use the % method; there maybe more work involved but it's accurate for my circumstances.

regards
Rachel.

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Rachel

www.r2s-bookkeeping.weebly.com
Ade


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Thanks R2s - prefer the % method myself

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lor


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thanks r2s for your replies!

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