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Old 30-04-2008, 11:04   #18
hokkers999
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Join Date: Nov 2005
Posts: 290
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Re: Switch account to my business name?

Quote:
Originally Posted by andygrif View Post
I think you've hit your own answer with what you've just said.... the connection has domestic use as well as your home business use.

The revenue (at least last year when I attended one of their fascinating seminars) want to see credible tax returns, so I really cannot imaging that right now they will question a legitimate claim for expense. In the same way as your phone, electric, etc, you need to work out a 'reasonable' percentage of use consumed by your business activity.

So. for example, let's say that 40% of all your internet activity is business related and your charge is £20 per month, then you can legitimately claim an £8 per month expense, and reduce your profit by £8 pm accordingly.

You'll be able to do the same on phone calls, but things like electric and gas all you'll be able to deduct is the difference between the cost of heating and lighting between running your home business and not running it.

According the Revenue, you cannot deduct any costs associated with the building (ie part of your rent or mortgage) but I have heard from some accountants that there are ways to do this.

You also, by running a business from home, leave yourself open to paying Business Rates to your local council on a portion of your house. Your Council Tax will be reduced, but BR are always more expensive than Council Tax.

Back to your question... Putting in a claim for the whole of your internet connetcion when you work at home is VERY likely to attract the wrong sort of attention - and you really don't want a Revenue investigation, which WILL cost you a lot of money, waste a lot of your time and cause you sleepless nights.

The bottom line is that you need to be truthful and the truth needs to be believable.
My accountant is fully qualified so I take her advice! I don't actually claim *anything* for home expenses ie any fraction of gas electricity etc. I have deliberately not asked for any change in council tax etc as there are other *potential* knock on effects when you come to sell like capital gains etc.

I agree that staying off the revenue radar is always preferable - again that's what I pay my accountant for - but I also have tax investigation insurance that pays up to 1/2 mill in professional fees.

Currently claiming deductions for mortgage interest IS now allowed again!

I guess the safe answer is simply status quo. Though if VM would do real static ip's then I would if they allowed it keep my residential and purchase a business bb as well.
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