I’ve tried searching already for this topic but haven’t found the answer, hence me asking - but apologies if this has already been covered as I suspect it’s a pretty common question!
I’m sole directory for a limited company and work exclusively from a dedicated office at home. There are occasional client visits.
I have calculated that my office is 8.51% of the floorspace of the house (excluding bathrooms). I have metered water. I’ve calculated the proportion of Water, Mortgage Interest, Electricity, Gas, Council Tax, Broadband and House Insurance as 8.51% of the annual cost of these, and a more representative proportion of the Broadband.
This results in a claim of £58.36 per month (it’s quite a big family house, so a lot more than the £2 or £3 per week claimable without full workings that HMRC allows).
How do I go about entering this into QuickFile? I’ve already set up an Expenses bank account to record direct expenses that I may pay personally then re-claim, and assume that’s where I will record the purchase payment. However I’m not sure what the supplier should be. Can anyone offer advice?
If you have to work at or from home you can get tax relief for the extra household expenses that you have to pay. Typically these extra expenses include:
the extra cost of gas and electricity to heat and light your work area
business telephone calls
You won’t be able to get relief on domestic expenses that you’re paying anyway - like your mortgage or council tax. You also won’t be able to get relief for expenses that relate to both business and private use - such as your telephone line rental, or Internet access.
From 2012-13 onwards, for payments of up to £4.00 per week, or £18 per month for monthly paid employees, you don’t need to provide any records of the household expenses you’re claiming relief for. For amounts above £4.00 you will need supporting evidence to show that the amount you are claiming is no more than the additional household expenses you have actually incurred.
As far recording in QF is concerned, you can record either journal at year end
Dr Use of home
Cr Director a/c
Or if doing on monthly basis with actual cash out lay
Dr use of home
Cr bank
(tag bank payment to use of home)
Urghhhh. I’ve just ploughed through a bunch of information on HMRC and various websites and it’s … mind numbing but gets me thinking!
There’s some suggestions that setting up a licence agreement between me and the company to rent out some office space is a good way to go. In this situation I charge £58 per month to the company, put £58/month annual income onto my self assessment under property section. I can then claim as a deduction any expenditure that is wholly and exclusively incurred in providing the facility to the company - £58 per month.
If I go this route I understand there may be some consequences regarding mortgage and insurance, but I’m happy to deal with these.
So, back to QF, entering these as monthly costs I guess I’d set up a supplier e.g. “Office Space: rental”, make the default category “Rent” and use my personal bank info, then pay a monthly invoice from the company bank account.
I’m a novice at accounting and have not long ago started a limited company, i guess you’d enter those expenses like you would for travel expenses, set up the supplier as allowed travel expenses with you as the payee, i’m guessing you’d do something similar for the rent…etc