How to reclaim utilities as self employed (home office)

stillalive88

Hi everyone, just a simple question as I'm a bit stuck on this and my accountant doesn't seem to want to be really helpful.

I know that if you work at home that can count as home office so you can put down utilities and rents as expenses.
How to physically do this eludes me though, especially since all utilities have now gone paperless and bills don't really exist anymore?

How do I go about it?

Gloomtastic!

stillalive88 wrote: »

Hi everyone, just a simple question as I'm a bit stuck on this and my accountant doesn't seem to want to be really helpful.

I know that if you work at home that can count as home office so you can put down utilities and rents as expenses.
How to physically do this eludes me though, especially since all utilities have now gone paperless and bills don't really exist anymore?

How do I go about it?

First of all, find another accountant. There's 1000s out there, find one that appreciates your business.

In Ireland, you cannot claim rental of your home office as a business expense. Otherwise your personal self would need to pay tax on the income! You can claim utilities.

Heating/electricity bills. If you live in a six room house and one room is a home office then 1 sixth of each.
Mobile - up to 100%
Broadband - up to 100%
As for e-billing, you can save them as PDFs and download them to a folder on your hard drive/cloud account.

Trojan

Gloomtastic! wrote: »

First of all, find another accountant. There's 1000s out there, find one that appreciates your business.

+1000 on this. It's crucial.

I have an accountant I can trust completely and who knows his stuff - and makes sure I don't miss deadlines.

I think that's worth paying a little bit more for.

stillalive88

Gloomtastic! wrote: »

First of all, find another accountant. There's 1000s out there, find one that appreciates your business.

In Ireland, you cannot claim rental of your home office as a business expense. Otherwise your personal self would need to pay tax on the income! You can claim utilities.

Heating/electricity bills. If you live in a six room house and one room is a home office then 1 sixth of each.
Mobile - up to 100%
Broadband - up to 100%
As for e-billing, you can save them as PDFs and download them to a folder on your hard drive/cloud account.

Thank you for the kind response.

So the e-billing is fine even if it says "amount due" and not really "amount paid"? Still counts as a receipt?

I don't understand what you mean about rent? I am paying rent to someone else, isn't that an expense I have? Without the house I wouldn't have the office therefore I wouldn't be able to do the work?

Speedwell

Are the rules the same if you are a work-from-home employee in a rented house and one of your rooms is a home office (and used only as a home office)?

Pawwed Rig

In general it is not to be recommended as it puts the PPR CGT exemption at risk

stillalive88

Pawwed Rig wrote: »

In general it is not to be recommended as it puts the PPR CGT exemption at risk

I don't follow... I just googled and it seems to be about selling property? I don't own anything, I'm the tenant, I'm renting from another Landlord, does this still apply to me?

Mrs OBumble

stillalive88 wrote: »

I don't follow... I just googled and it seems to be about selling property? I don't own anything, I'm the tenant, I'm renting from another Landlord, does this still apply to me?

No, it doesn't.

It's not recommended for owners, for that reason. But fine for renters.

Mrs OBumble

Speedwell wrote: »

Are the rules the same if you are a work-from-home employee in a rented house and one of your rooms is a home office (and used only as a home office)?

No. If anything you should be claiming from your employer (who you are kindly providing free utilities to at the moment).

Pawwed Rig

Mrs OBumble wrote: »

No, it doesn't.

It's not recommended for owners, for that reason. But fine for renters.

There is a possible issue with renters turning a residential premises into a commercial whereby rates should be paid to the local council though.

stillalive88

Pawwed Rig wrote: »

There is a possible issue with renters turning a residential premises into a commercial whereby rates should be paid to the local council though.

Are you sure? A home office could convert itself into a commercial premise?? How would that physically come to be?

Pawwed Rig

stillalive88 wrote: »

Are you sure? A home office could convert itself into a commercial premise?? How would that physically come to be?

The point is you should not be operating on a commercial basis from a building zoned residential.

duploelabs

Pawwed Rig wrote: »

The point is you should not be operating on a commercial basis from a building zoned residential.

If you've converted parts of your building in to specialised permanent professional workplace, i.e installed a hydraulic jack in your garage or air handling in to your kitchen then you're subject to this. However simply putting in a work table with a laptop isn't considered enough for rezoning

tina1040

Mrs OBumble wrote: »

No. If anything you should be claiming from your employer (who you are kindly providing free utilities to at the moment).

She's claiming expenses against income for tax calculation so self employed and utililities and other expenses are being charged to the client via her hourly/weekly rate.

Pawwed Rig

duploelabs wrote: »

However simply putting in a work table with a laptop isn't considered enough for rezoning

So I can run a law business from my rental residential property with full deductibility for expenses?

2RockMountain

Pawwed Rig wrote: »

So I can run a law business from my rental residential property with full deductibility for expenses?

You'd want to check what your rental lease says about running a business, for a start. There is a big difference between 'working from home' and running a business that may involving having customers visiting.

duploelabs

2RockMountain wrote: »

You'd want to check what your rental lease says about running a business, for a start. There is a big difference between 'working from home' and running a business that may involving having customers visiting.

Or having Employees, certainly when I started my food business from home that was a major stickler. Still working a 7 day week :rolleyes:

Mrs OBumble

Pawwed Rig wrote: »

The point is you should not be operating on a commercial basis from a building zoned residential.

That applies equally to rented and owner-occupied premises.

Stheno

THere is some amount of misinformation in this thread in relation to employees working from home.

If you are e-working as defined by revenue, then it will not affect CGT if you own a house.

Speedwell, your employer can grant you tax free expenses of 3.20 per day towards heating etc.

All explained here, including the definitinon of an e-worker. http://www.revenue.ie/en/tax/it/leaflets/it69.html

Speedwell

Thanks, Stheno. I'll make sure not to spend it all in one place

Stheno

Speedwell wrote: »

Thanks, Stheno. I'll make sure not to spend it all in one place

With an average working year of 231 working days, if you work exclusively from home for all of that time, that's almost €740 tax free!

Speedwell

Stheno wrote: »

With an average working year of 231 working days, if you work exclusively from home for all of that time, that's almost €740 tax free!

Good point, you're right.

stillalive88

Can I just ask again

1- I'm a Sole Trader
2- It's web design, I don't need to do stuff like bake cakes or meet retail customers

-> Can I put rent or part of it off tax in any way?

2RockMountain

stillalive88 wrote: »

Can I just ask again

1- I'm SELF employed
2- It's web design, I don't need to do stuff like bake cakes or meet retail customers

-> Can I put rent or part of it off tax in any way?

Have you incurred any extra rent in order to provide space for your business?

Stheno

stillalive88 wrote: »

Can I just ask again

1- I'm SELF employed
2- It's web design, I don't need to do stuff like bake cakes or meet retail customers

-> Can I put rent or part of it off tax in any way?

Yes, see here http://www.revenue.ie/en/business/running/allowable-expenses.html

duploelabs

stillalive88 wrote: »

Can I just ask again

1- I'm SELF employed
2- It's web design, I don't need to do stuff like bake cakes or meet retail customers

-> Can I put rent or part of it off tax in any way?

and we will repeat again, Ask a competent accountant. Someone who has experience dealing with a home run business

Stheno

duploelabs wrote: »

and we will repeat again, Ask a competent accountant. Someone who has experience dealing with a home run business

Or even speak to Revenue themselves, I have always found them extremely helpful to deal with.

srsly78

stillalive88 wrote: »

Can I just ask again

1- I'm SELF employed

This means a big fat nothing. Are you a sole trader or a proprietary director? As others have already told you, get a better accountant - this is basic stuff.

stillalive88

srsly78 wrote: »

This means a big fat nothing. Are you a sole trader or a proprietary director? As others have already told you, get a better accountant - this is basic stuff.

I'll edit it, I thought it was self explanatory.

I'm a Sole Trader.

Stheno thanks for the tip! I'll ask Revenue as well. And will look for a new accountant...
Another thing, I know the link you gave me but to me is not clear: who is that addressed to? Proprietary Directors? Self Employed? Employers?
When it says "Wages, rent, rates, repairs, lighting and heating etc.", is it talking about rent as a residential rent? It's so vague

Gloomtastic!

stillalive88 wrote: »

I'll edit it, I thought it was self explanatory.

I'm a Sole Trader.

Stheno thanks for the tip! I'll ask Revenue as well. And will look for a new accountant...
Another thing, I know the link you gave me but to me is not clear: who is that addressed to? Proprietary Directors? Self Employed? Employers?
When it says "Wages, rent, rates, repairs, lighting and heating etc.", is it talking about rent as a residential rent? It's so vague

Double check with Revenue but we've had this question on here many times and it's always been a no, you cannot claim part of your personal rent as a business expense.

One way round it, I reckon, would be for you to have two leases - one personal and one business. With the rent being paid from both your personal account and business account respectively. Can't see any landlord going for that though......

Stheno

Gloomtastic! wrote: »

Double check with Revenue but we've had this question on here many times and it's always been a no, you cannot claim part of your personal rent as a business expense.

One way round it, I reckon, would be for you to have two leases - one personal and one business. With the rent being paid from both your personal account and business account respectively. Can't see any landlord going for that though......

In the revenue link I referenced it talks about claiming expenses which are part for business use and part for private use, and rent is the first expense mentioned

srsly78

Yes, a dedicated home office can be expensed. But if you just throw your laptop on the kitchen table then it's hard to make a case for rent expenses (electricity/heat/telecoms may be allowed in this case tho).

Stheno

srsly78 wrote: »

Yes, a dedicated home office can be expensed. But if you just throw your laptop on the kitchen table then it's hard to make a case for rent expenses (electricity/heat/telecoms may be allowed in this case tho).

That's what I was thinking you'd need to be set up so that if you were audited you could prove the exclusive use

stillalive88

Stheno wrote: »

That's what I was thinking you'd need to be set up so that if you were audited you could prove the exclusive use

Well yes of course all the stuff from the business takes a ****load of space from my house, all the records, computers, working surfaces, I'm basically occupying the living room that now has no "living" in it anymore! Maybe I can indeed prove my case. I'll surely have to look into better accountants. I'm less and less convinced by the one I have. I don't know if I drop them will I incur into penalties or whatever I never even saw a contract from them or something. I'll have to revisit what I signed with them, it was very short I think they just registered me for tax and told me basically "see you in a year and a half just bring us a bag of receipts", wasn't really helpful. Was trying to ask them what format would they prefer the data in and they wouldn't say

Stheno

stillalive88 wrote: »

Well yes of course all the stuff from the business takes a ****load of space from my house, all the records, computers, working surfaces, I'm basically occupying the living room that now has no "living" in it anymore! Maybe I can indeed prove my case. I'll surely have to look into better accountants. I'm less and less convinced by the one I have. I don't know if I drop them will I incur into penalties or whatever I never even saw a contract from them or something. I'll have to revisit what I signed with them, it was very short I think they just registered me for tax and told me basically "see you in a year and a half just bring us a bag of receipts", wasn't really helpful. Was trying to ask them what format would they prefer the data in and they wouldn't say

A good accountant is vital tbh try and get one via personal recommmendation

2RockMountain

stillalive88 wrote: »

Well yes of course all the stuff from the business takes a ****load of space from my house, all the records, computers, working surfaces, I'm basically occupying the living room that now has no "living" in it anymore!

I've no direct experience in these matters, but if I was Revenue, I wouldn't accept this as evidence of 'additional cost'.

duploelabs

2RockMountain wrote: »

I've no direct experience in these matters, but if I was Revenue, I wouldn't accept this as evidence of 'additional cost'.

Then why are you second guessing posters who have got direct experience in this matter

stillalive88

Stheno wrote: »

A good accountant is vital tbh try and get one via personal recommmendation

This one was through personal recommendation ):

mrawkward

We are taling peanuts here in the overall scheme of things. Never fails to amaze me how people are always looking for any kind of cockamamie schem to save a few quid in tax! Same effort put into the business would yield x10!!

srsly78

Utility expenses aren't worth very much, but rent in Dublin is not peanuts.

mrawkward

Acid test. The kinda stuff revenue does.. Business grows and moves to a bit of office space...rent falls by how much?

srsly78

Well a dedicated home office in dublin (1 room in rented house) might cost say e400/month rent. Can you get proper office space for that!? There is a lot of empty office space around tho...

I would imagine rent would be larger for a proper business, compared to a 1 person work-at-home situation.

stillalive88

mrawkward wrote: »

We are taling peanuts here in the overall scheme of things. Never fails to amaze me how people are always looking for any kind of cockamamie schem to save a few quid in tax! Same effort put into the business would yield x10!!

It's a different lifestyle. I don't earn a lot and I don't spend a lot. Every little counts. I don't own a car, I don't own almost anything. I do a lot of activism and I prefer to have my impact on the world helping others than amassing riches for myself. But this is all OT.

And yes, considering the rents in this country are outright INSANE, it has to count for something...

mrawkward

stillalive88 wrote: »

It's a different lifestyle. I don't earn a lot and I don't spend a lot. Every little counts. I don't own a car, I don't own almost anything. I do a lot of activism and I prefer to have my impact on the world helping others than amassing riches for myself. But this is all OT.

And yes, considering the rents in this country are outright INSANE, it has to count for something...

With all your activism ideals, do you not want to pay your fair share of tax? or is that only for the rich?

stillalive88

mrawkward wrote: »

With all your activism ideals, do you not want to pay your fair share of tax? or is that only for the rich?

Well I'd never encourage tax evasion of course. You operate within the boundary of the law, which is neither moral nor ethical. Law is just law, is a set of rules you are given. If I can, legally, give less money to corrupted governments that set up wonderful things like Irish water etc, and more to helping the homeless, well I will and my conscience is more than crystal clear on this.