Starting your own business

About us Business Structures Business Plans Business Finance Flexible Business Loans Small Business Marketing Start an Internet Business Home Based Business Company Formation Accounting and Bookkeeping Business Zone Business Dictionary
Latest News : Top 7 Thai expat myths - The Thaiger      Business start up advice ? Ready for Business tips on starting a business - Ready for Brexit      What should motivate the wellness industry: Passion or profit? - Startups.co.uk      Immigrant-led businesses 'contribute 13 billion to Scottish economy' - University of Strathclyde      The Enterprise Investment Scheme explained - Startups.co.uk      

Working from Home and Taxation

 

There are a number of practical points which require consideration when working from home including any taxation effects. Using a private residence or a part of it for business purposes might result in part of the person’s home being treated as business premises for taxation purposes.

Currently, when a person sells their principle private residence, the whole amount of any monetary gain is not subject to taxation.

When a person using their part of their home as an office, in relation to tax rules, that portion of the residence is not subject to the same exemption and therefore, on the sale of the property, might result in an assessment and tax charge being levied by Revenue and customs. See http://homebuying.about.com/od/marketfactstrends/qt/SelfEmpResSale.htm for further details.

Although working from home might lead to the above charge, a potential advantage is that whist the business is using the home for its operations; it can make a claim for equivalent to the cost which the residence bears in sustaining its activities.

The use of home as office charge is an estimated cost of the utilities, wear and tear and other services provided by the home to the business and are deductible from the year end accounts.

The estimated charge will generally be accepted by Revenue and Customs if it is one which can be deemed to be reasonable. The amount might be based on either simple or more detailed calculations which take in to account individual household bills and an apportionment allocated to business use.

An accountant or the Revenue and Customs themselves might be best placed to provide their agreement that any anticipated claim for use of home as office expenses.

 
Email This Page  Print This Page


 
 
Site Search
Take the 6 question quiz and test your knowledge on matters relating to starting your own business
1. The break-even point is achieved at the junction of
 
Gross profit is the same as net profit
Selling price is equal to cost price
Total costs equal total revenue
Revenue exceed costs by 1
  
Submit
 
Single Question Survey
Did you know that company formations can be carried out entirely online without any need for paper or written signatures?
 
Yes
No
  
Submit