Self Employed - acceptable expenses

ccc

Hi,

I am looking for some guidance here on allowable expenses. I am a sole trader working from a home office. I am currently renting my house. What portion of the rent should I allocate as a business expense? One room is dedicated yo my office. Also what portion of gas and electricity bills should I allow as expenses. I have had advice ranging fro 1/3rd of rent to 100% of heating and electricty. Any guidance greatly appreciated.

namenotavailablE

The general principle is that the allocation should be a fair approximation to reality ie if the room constitutes 25% of the floor area, then maybe 25% of your rent and ESB bills might be considered reasonable. If you use a landline, you'd need to do an analysis of a typical month's bills between business/ non-business, unless it's a dedicated 100% business landline.

In general, I'd personally feel that claiming 100% of an expense which typically refers to 'mixed' business + non-business activities is unlikely to be accepted by the Revenue Commissioners.

drunkmonkey

What about food & transport, how much can you claim, I spend roughly €300pm on petrol + €15 per day on food, €100 of the petrol would be for personal use but the rest is all business related, can i claim back the vat on the petrol and also put it against my tax bill?

namenotavailablE

VAT can't be reclaimed on petrol. It can however be reclaimed on diesel.

Assuming you own a company or are self-employed and the E200 per month on petrol is 'wholly and exclusively' ( a well-versed tax phrase) for business purposes then you can claim that against your business income. regarding subsistence, you'd need to search the Revenue website for information on that- I believe that you're allowed a certain amount of subsistence per day but don't have details.

drunkmonkey

thanks I must check it out, it's a pity you can't drop into the revenue and tell them what you do and they'll tell you what you can and can't claim...or can you?

ccc

Thanks namenotavailabl.