11025
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Post by 11025 on Oct 21, 2015 9:18:38 GMT
Morning everyone ,
I am now reliant on my P2P investments and some other financial things for my earnings . Does anybody have any relevant info regarding P2P tax issues and also using home for office etc ,I have had a trawl but as this is all relatively new can't find too much of substance. I don't know if I will ever get to the stage where big tax will be paid as my wife has a similar business model and we can both earn enough to sustain our reasonable standard of life with the current allowances (Children have left the nest !)
thanks
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bigfoot12
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Post by bigfoot12 on Oct 21, 2015 9:41:48 GMT
I suggest you trawl around your local friends and contacts for a good accountant. My understanding is there are lots of traps once you try to do anything clever.
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Post by lb on Oct 21, 2015 10:02:10 GMT
this is what my accountant once sent me
If you are self-employed, there is a type of relief called use of home as office that can be offset against your tax liability.
If you run your business partially from home you could set a proportion of your home running costs against income tax. What sounds like a very easy task for any tax accountant has proven to be quite difficult as the HM Revenue & Customs can easily argue the figures as there are no clear rules that can be applied.
Among the expenses allowed in this category we can mention the following: Council Tax, Mortgage interest, Rent, Repairs and maintenance, Cleaning, Heat, light and power, Telephone, Broadband, Metered water charges.
The factors to be taken into account when apportioning an expense include according to HMRC:
•the area used for business purposes,
•the usage in connection with electricity, gas or water and
•the time used for business purposes compared to other use.
By following this link (www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm) you can see some examples provided by HMRC related to ways of approaching the use of home as office.
This is what the courts have approved in terms of apportioning expenditure for home as office:
"… it is possible to apportion the use and cost of a room on a time basis, and to allow the expense of the room during the hours in which it is used exclusively for business purposes, in the same way as it is possible to calculate the business expenses of a car which is sometimes used for business purposes exclusively and sometimes used for pleasure." (Templeman J in Caillebotte v Quinn [1975] )
Caution: The use should be dual (personal plus business use- e.g. a dining table) otherwise this area can be subject to Capital Gain Tax.
Area - floor area of the property - e.g. 10%
Time- Based on 24 hours e.g. 3 per day, 7 days a week
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11025
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Post by 11025 on Oct 21, 2015 10:02:24 GMT
Cheers for the replies ,
I had an accountant some years ago from a previous business , I will catch up with them at some stage . I am not thinking I will get to the tax situation but you never know , might as well be prepared !
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james
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Post by james on Oct 21, 2015 14:02:34 GMT
Have you registered your small businesses with HMRC?
I doubt that your investment managing activities will qualify as a business and since not a business, you will also be ineligible for the expenses allowable for businesses. HMRC has in the past tried to force epople to be businesses and the courts have ruled in general that it is hard for things that normally look like investing to become a business.
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11025
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Post by 11025 on Oct 21, 2015 15:17:19 GMT
Have you registered your small businesses with HMRC? I doubt that your investment managing activities will qualify as a business and since not a business, you will also be ineligible for the expenses allowable for businesses. HMRC has in the past tried to force epople to be businesses and the courts have ruled in general that it is hard for things that normally look like investing to become a business. Thanks for the reply James , at present I have been filing a tax return every year which shows mainly interest , since 2011 after finishing a long stretch of employment . Since then I have never earned enough to pay tax and neither has my wife but we just kept it going along with paying our Class 2 NICs . It will probably be better for us to continue as we are then , we are comfortable with the income we have so there is not really any need to push things further.
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