Working from hom

[sparklyscotty]

Hi there. Where is the best place to find info on how to separate personal and business expenses when working from home? I have a studio in my house, with a DSL line. But my cable company also includes my home phone and tv bill on the same invoice. It saves me about a tenner a month, but I don't have any idea how to separate the two (or my utility bill) into personal and business. :?
Any help / experience?
-Angel-

 

[BMS]

Hi Angel

If the bill is itemised it should be no problem analysing the bill as to private and business.

With regards to the utility bills, gas,electric etc the easy formula is :

1 / number of rooms x utility cost

ie if you have 6 rooms then you can claim 1/6th cost of the gas & electric as a business expense.

 

[epiphany]

I think, correct me if I am wrong, if you do claim for any house related costs you are then liable for capital gains tax which means if you sell on the propery you have to pay a percentage of any profit you make.

 

[profitxchange]

Do not worry about capital gains if you are only using one room and it can be returned to an ordinary room when you sell up. It is only when a much bigger business develops at home that you need to have concerns.

 

[james constant FCCA]

Hi

you shoul not be using space exclusively for business or you jeopardise your Capital gains exemption for your home in the event of sale. A percentage of home running costs based on a reasonable basis (acceptable to the taxman can be used). Also, there are certain other areas where you could create business additional expenses to reduce your taxes e.g. using all available personal allowances in the family,. travelling & subsistence, pension contributions etc.

FREE Weekly Tax Tips written in understandable language for the small business owner.