Use of office at home and business rates

[Platypus]

I saw my accountant today who, amongst other things, trotted out the usual line about "being careful not to claim too much against tax" for using a home office, because this would likely trigger HMRC to impose business rates on that part of the property.

I remembered reading something about this being wrong, so I've searched and came up with this which I thought I'd post here for your information and edification.

It relates to a case from 2003 where a Revenue employee (no less) won a case against the Revenue!

Articles here and here

Home workers in the UK breathed a sigh of relief this week after the Inland Revenue lost a case brought by one of its own employees when she learnt that she might have been forced to pay business rates as well as local council tax.

The case concerns Eileen Tully, who was given permission by the Revenue to work from her home after suffering a disabling back injury. However according to the FT, her employer’s attempt to force her to pay business rates was quashed by the Lands Tribunal, which ruled this week that homes should only be re-rated in instances where a house has lost its domestic character, or if it is used as a venue for meetings between employees.

The Public and Commercial Services Union, which backed Mrs Tully, said that the ruling was important, as it affects around 2 million individuals who work from home in the UK.

[Pickle2]

My accountant just told me last night I can no longer claim a proportion of my rent (15% for the spare bedroom that is the office) as an expense.

This also goes for council tax, mortgage intrest etc etc.

See:
http://www.hmrc.gov.uk/manuals/eimanual/EIM32815.htm

Anyone else been made aware of this recently? I have an expensive flat, so 15% is like 4k p/a. Im gutted.

Someone say it aint so!!

[contractor79]

you can claim £2/week for use of home as office That's what I do.

[NickFitz]

My accountant just told me last night I can no longer claim a proportion of my rent (15% for the spare bedroom that is the office) as an expense.

This also goes for council tax, mortgage intrest etc etc.

See:
http://www.hmrc.gov.uk/manuals/eimanual/EIM32815.htm

Anyone else been made aware of this recently? I have an expensive flat, so 15% is like 4k p/a. Im gutted.

Someone say it aint so!!

Well, the document you link to clearly states that council tax and rent haven't been deductible since the 2005-2006 tax year, so no, you can't claim them as expenses for 2006-2007 or later years. It is so.

Sorry if you expected the rest of us to subsidise your "expensive" flat forever - I suppose you could move somewhere cheaper, or maybe pay your household expenses out of your own pocket, rather than ours?

I very much doubt that whatever use you made of the spare bedroom for "business" purposes would actually justify your £4,000 p/a subsidy from the taxpayer (ten minutes on a spreadsheet once a week, by any chance?), which is probably why they've put a stop to such things. Find another goose if you want free golden eggs; and count yourself lucky they don't want to backdate the change.

ADDENDUM: this is where they tell you why you can no longer claim relief. If you can prove that you only incur the cost of renting your spare bedroom because you need it as an office - that is, you can demonstrate that you rented the spare bedroom wholly and exclusively to support the operation of your business, and would otherwise have no objection to the landlord filling it up with homeless people - then you should still have a case.

[NickFitz]

you can claim £2/week for use of home as office That's what I do.

£3/week from April 6 2008 - but you must satisfy these criteria (make sure you follow the links, particularly the examples of how the regulations should be interpreted and applied).

[malvolio]

£3/week from April 6 2008 - but you must satisfy these criteria (make sure you follow the links, particularly the examples of how the regulations should be interpreted and applied).

Whoa! I mean, that's almost £63 a year savings on tax over the year if you're on higher rate. Free champagne all round...

Is it really worth it?

[FiveTimes]

Whoa! I mean, that's almost £63 a year savings on tax over the year if you're on higher rate. Free champagne all round...

Is it really worth it?

Agreed, I can't be bothered for that amount.

[Pickle2]

2 quid a week it is.

Nick, grow up.

[Lewis]

2 quid a week it is.

Nick, grow up.

It has been increased to £3.

http://www.accountingweb.co.uk/cgi-b...%20%25B%20%25Y

[slackbloke]

My accountant just told me last night I can no longer claim a proportion of my rent (15% for the spare bedroom that is the office) as an expense.

This also goes for council tax, mortgage intrest etc etc.

See:
http://www.hmrc.gov.uk/manuals/eimanual/EIM32815.htm

Anyone else been made aware of this recently? I have an expensive flat, so 15% is like 4k p/a. Im gutted.

Someone say it aint so!!

It ain't so. Your accountant doesn't know what he is talking about.

Ref : http://news.bbc.co.uk/1/hi/programme...ch/7459639.stm

http://www.hmrc.gov.uk/manuals/bimmanual/BIM45745.htm