Can I ask what amounts you use with the different tax years?
What I am getting at, if a client asked you to do his bookkeeping or accounts for several tax years, what amounts would you claim?
e.g. as the mileage allowance or the use of home allowance?
for the following tax years:
2011/12
2010/11
2009/10
2008/09
I am curious what book-keepers have been taught, read or understand about what is correct practice?
This is really a question for book-keepers rather than Accountants. So the accountants out there please leave joining in for a while (!), or at least until a few book-keepers have posted. That is of course if anyone wants to post their thoughts about what they would do.
First thing I am going to say is b**gger. I just typed in a long reply, and instead of minimising the screen I closed it and lost it all
I'll start again, with broad strokes
For Mileage allowance, I refer to BIM47701/2
Between April 2002 and April 2011, Mileage allowance £0.40/ mile. After 10K reduced to £0.25.
From April 2011 increased 1st allowance to £0.45. Other types of transport can be claimed, at different rates, plus a passenger allowance can be claimed from 2011 on.
The limits and restrictions to this are that
a) AMAP has to be applied from the start, and can only be dropped for actual expenses, when the vehicle is changed
b) Can only be applied if below VAT threshold. If threshold reached, then rate still applies until vehicle is changed, then actual expenses should be used.
c) Cannot be claimed for "commuting" journeys, between home and main palce of work/ office. If your office/ place of work is your home, then travel to other places where you carry out your work is allowable.
d) No other vehicle expenses can be claimed.
For Use of Home, I refer to BIM47800
For that I understand that either a "reasonable" allowance can be allowed, or specific deductions based on varying criterior can be used.
I have not found any reference to a reasonable allowance, for the self employed but like most others, I use the same rates as for an employee at £3/ week for n weeks of the year, depending on holidays, time off etc (increased to £4/ week from 2012).I use this method for clients who do occassional admin from home, not the ones that actually work from home (like me)
For those that are due more specific deductions there are several methods of calculating a reasonable apportionment of home expenses.
The individual expenses do not in themselves have to be Wholley & Exclusively used for business, just an identifiable portion of them.
Depending on the client, I use one of the example methods used in BIM47825 for calculating the apportioned expenses.
The main things I would allow for are
Utilities (heat, light, power, water etc)
Telephone/ Broadband
Mortgage interest is applicable
Council tax
Specific room repairs/ maintenance.
I have not been taught these specifics but it is what I have understood from HMRC guidance (mainly BIM manuals)
Wella has dealt with the mileage allowance part of the question.
As for use of home as office, it depends on whether you are self employed, employed or working through a limited company.
If self employed, you can claim a reasonable proportion of those household running costs that represent the space and time in which your office operation occupies your home. This includes a proportion of your rent, council tax and water rates. These costs can include mortgage interest payments, council tax and home insurance.
If employed, you can only claim the additional variable expenses incurred by working at home. These costs amount to the increased energy needed to heat and light your property for longer, and the extra water used if that is metered. However, if the employee cannot measure the increased energy they can claim an allowance of £4 per week (£3 up to 5th April 2012).
Company directors/owners, operating from home, could charge their company a renatl for use of a room in their home. You will find more details here.
