Harnett Accountants Wimbledon – September Tax Q&A Part 1

Harnett Accountants Wimbledon are pleased to present part 1 of our September Tax Q&A:

Q. I run my own company from an office in a spare bedroom at home, and my wife runs a separate company from a downstairs office in the same house. Can we both claim £3 per week expenses for use of home from our companies? Would the situation be different if we both worked full time for the same company?

A. Yes, you can both claim the use of home expense allowance, which is now £4 per week as from 6 April 2012. It makes no difference whether you both work for the same company or for different companies.

Q. I own a number of rental properties but this year I’ve been sued over unpaid service charges. The dispute has been resolved, but I’ve been left with legal costs. Can I deduct those legal costs from the property rental income for the year?

A. In general any legal fees associated with acquiring or improving the property or defending the title to the property or extending a lease on a property cannot be deducted from the rental income, as they are capital expenditure. Other legal fees associated with annual bills or service charges should be allowable. You should keep all the paper work associated with the dispute just in case the Taxman asks about the legal fees in future.

Remember to send in your questions by email to have them answered in next month’s Q&A from Harnett Accountants Wimbledon. Also you can follow us on Twitter, Facebook and Google+. Additionally, you can keep reading our daily blogs.

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