How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask HM Accountax Ltd Your Own Question
HM Accountax Ltd
HM Accountax Ltd, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 315
Experience:  I am an accountancy professional with more than10 years hand on experience in audit, accountancy and tax affairs.
74131858
Type Your Tax Question Here...
HM Accountax Ltd is online now

I run a online retail and photography business from home.

Customer Question

I run a online retail and photography business from home. For this purpose I have a home which is significantly larger than I would have otherwise, with one room used solely as a photo studio another solely for storing stock and other rooms which are used for admin etc as well as for home use. As directors my partner and I are also employed by the business. I have been told that I can't claim expenses for the rent, heat and light of the rooms used solely for business and want to check if this is correct
JA: Have you talked to a tax professional about this?
Customer: I have talked to my accountant, but am still unconvinced by the answer. As I say, we have rented a house with the needs of the business particulaly in mind and these rooms are used solely for business
JA: Anything else you want the Accountant to know before I connect you?
Customer: No, I think that's it
Submitted: 8 days ago.
Category: Tax
Expert:  HM Accountax Ltd replied 8 days ago.

Hi,

I am an advisor at JA and happy to assist you.

I am looking into your query and come back to you.

Regards

HMAT

Expert:  HM Accountax Ltd replied 8 days ago.

Hi,

You cannot claim the rent etc. however, you can claim use of home as office expenses.

There are two ways:

1. Simplified method - Claim the £6 per week use of home as office expense as published by HMRC. This is probably the easiest option as does not require further justification or receipts.

2. Detailed method. - Provide justification for a higher claim. On this basis you would add up the costs associated with running your home and apportion a claim for the amount of space and time used by your Company.

How do I justify a higher claim?

The below formula is a good basis for calculating an apportioned charge for a use of home as office claim:

B + (D% x C) x E = F

A

Where:

A = The total number of rooms in the home

B = The number of rooms dedicated solely for business use

C = The number of rooms used partly for business and partly for personal use

D = The percentage of time spent for business use in comparison to personal use

E = The total home expenditure including water and sewerage, rent, mortgage interest, heat and light, buildings insurance.

Please note that a business using a substantial part of their property for business use may have implications on capital gains tax, business rates and principle private residence relief.

I hope this answers the query.

Regards

HMAT

Customer: replied 8 days ago.
Thank you for your response. Can I just check. Both myself and my partner are not only directors, but also employed by the company. Are we still entitled to use the second detatiled method you describe above - Many thanks Nick
Expert:  HM Accountax Ltd replied 8 days ago.

Hi Nick,

Yes, you can use the second method. It makes no difference if you both are directors and employees.

Regards

HMAT