Expenses

[Adam]

Hello,

I have just started a UK Ltd Company to provide Business and IT consulting services. I am the only director and have converted a part of my house for the sole use of my office as I run the business from home.

As most expenses are just practicle day to day stuff can someone please clarify quickly:

1. Can I claim the floor space percentage used by the bsuiness as an expense on the Gas, Power and Council Tax bills?

2. Can I claim 100% broadband as it would not be purchased if not for the business? (I think the main telephone line is not allowable as its a shared expense but any identified business calls could be)

3. I can't make any sense of the conflicting advice I see about sustenance and expenses. If I am at a clients premises consulting for most of the day can I claim any sustenance expenses? I think if at home I could not but at clients maybe? At all? I dont envisage being away overnight anyway so don't get too technical...

4. What are the rules on entertainment expenses... i.e. stocking the beer in the fridge for any business meetings I may have? or even a business lunch/dinner at the local weatherspoons?

I know HMRC has a boeheameth section on allowable business expenses but I think many people would appreciate a quick run down on what is done in the real-world for small companies like mine, at least when starting up with the above which in reality are just comon sense examples?

Thanks in advance.

[deanshepherd]

Some thoughts..

1. Yes. For a practical way to calculate an appropriate amount look at this link http://www.taxationweb.co.uk/taxdoctor/1.php (although it refers to a sole-trader the principle is the same). Be wary of using part of your home exclusively for business purposes as this may affect your CGT position and liability to pay business rates.

2. Yes. Any private use of the internet is widely accepted as incidental to business use.

3. No. Subsistence is only allowable for overnight stays and even then does not include lunches or food throughout the day.

4. The Revenue do not like either you or your clients to enjoy yourself so entertaining them is not allowed. Staff entertaining is fine. Reasonable refreshments for meetings will also be fine (alcohol would probably not be reasonable in the Revenue's eyes).

Hope that helps.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk