pay house bills from biz account?

nowherefar

I'm recently self-employed and have a separate business bank account (as a sole trader, not a company) and I work from home - can I pay house bills (ie. electricity) from my business bank account?

I know in theory a percentage of the bills can be on the biz since I work from home, but where/how would I go about paying a percentage from my biz account? Do I just pay the bills from my personal account as usual and then transfer a percentage from my biz account to my personal account to cover it?

Also, how much is a reasonable/allowable percentage to put on the biz these days?

dbran

Hi

Whether you pay them in full from your business account and add a proportion of the expense back in the tax computation or pay them personally and allow a deduction in the tax comp, the effect on the assessable profits for tax purposes would be the same.

You need to provide a reasonable estimate of the percentage of business element of the expenditure. If you estimate is reasonable it shoudl be accepted by revenue.

dbran

yutta

nowherefar wrote: »

I'm recently self-employed and have a separate business bank account (as a sole trader, not a company) and I work from home - can I pay house bills (ie. electricity) from my business bank account?

I know in theory a percentage of the bills can be on the biz since I work from home, but where/how would I go about paying a percentage from my biz account? Do I just pay the bills from my personal account as usual and then transfer a percentage from my biz account to my personal account to cover it?

Also, how much is a reasonable/allowable percentage to put on the biz these days?

I'd be very careful about running a business from a private address. There can be serious capital gains tax issues down the line if you choose to sell/bequeath the house.

nowherefar

dbran wrote: »

Hi

Whether you pay them in full from your business account and add a proportion of the expense back in the tax computation or pay them personally and allow a deduction in the tax comp, the effect on the assessable profits for tax purposes would be the same.

You need to provide a reasonable estimate of the percentage of business element of the expenditure. If you estimate is reasonable it shoudl be accepted by revenue.

dbran

Thanks for the reply. What is a reasonable percentage though? I know its probably different for everyone but still.. are there no rough guidelines?

nowherefar

yutta wrote: »

I'd be very careful about running a business from a private address. There can be serious capital gains tax issues down the line if you choose to sell/bequeath the house.

It's just a rented flat so no worries there hopefully.

yutta

nowherefar wrote: »

It's just a rented flat so no worries there hopefully.

You should really check the terms of your lease. I'd talk to your landlord too.

barneystinson

yutta wrote: »

I'd be very careful about running a business from a private address. There can be serious capital gains tax issues down the line if you choose to sell/bequeath the house.

These consequences only occur if a part of the residential premises is used wholly and exclusively for the purpose of a trade.

So if you have an office in your house out of which you conduct your business, but you also allow your children to use the computer for entertainment, or the desk for doing homework, then the room is not wholly and exclusively in use for a trade... In other words it's an absolute minefield for Revenue.