Working from home, energy tariffs.

[PrenticeBoyofDerry]

Does anybody who works from home or uses the home as part of their business.
Have their domestic household energy supplied using a business tariff?
If so does it end up being cheaper?
I am aware that it is fixed tariff and seems to be much lower than the normal domestic tariffs and less confusing regarding the way they are work out.
So anyone do this?

 

[scottyboyiow]

Hello mate,

This info might be usefull. The misses runs a salon in our home, and although we have a meter for both the salon and the house, we only have one NPAN number so both are supplied via BG business tariffs. They are by no means cheaper and we have to pay a standing charge on both meters per day, however we can claim against our tax. Originally i went BG and they were fine, however after the first year I got caught into a fixed 2 year contract which was double the price of the first year. They aren't allowed to fix you for 2 years anymore, but unfortunatly this only came into affect last year. Just make sure you are registered as a microbusiness as this gives you more protection, which I wasn't orignally.

FYI, we currently pay about £25 a month standing charge and 16pKwh.
However my contract ends in January so have had companies on the phone to me, one offered E.ON at 5p standing charge (under a fiver a month), and 11ppkWh. Which was more like my first year at BG. Hope this helps.

 

[PrenticeBoyofDerry]

Thank you for the reply.
Was you able to claim all the energy charges both for business use and domestic back on your tax. As the account is a business account or did you have to calculate the business use against the domestic use?
It's an NPower business tariff that I am looking at.

 

[geraint]

Thank you for the reply.
Was you able to claim all the energy charges both for business use and domestic back on your tax. As the account is a business account or did you have to calculate the business use against the domestic use?
It's an NPower business tariff that I am looking at.

You can claim everything..... but when you come to sell, it is classed as a business and capital gain tax applies...

 

[PrenticeBoyofDerry]

You can claim everything..... but when you come to sell, it is classed as a business and capital gain tax applies...

So when/if. I sell the house it comes under cap gains?
I suppose there are ways around this, like changing back to domestic tariff, if you decide to sell?
Or am I being naive?

 

[scottyboyiow]

Having a business/domestic property means you will have to pay domestic council tax, and also business council tax, although there are some exceptions. You are then also meant to work out a percentage of what your usage is for business and a percentage for domestic. As geraint said, you can get away with claiming alot more than you should, but not 100%. For example we claim 70% - 30% in favour of the business. What with using washing machine/tumble dryer etc for business use aswel As far as I am aware, in theory, you would have to pay capital gains tax on the percentage of the property that was used for the business. Once you have the capital gains tax worked out, you subtract any losses included the percentage it cost you to buy that part of the property and 'renovate it, not decorate , minus any tax reliefs you are entitled too. This link may help.

http://www.hmrc.gov.uk/cgt/businesses/reliefs.htm

Have a good look through this site, should explain the capital gains tax to you.

 

[geraint]

You can claim everything..... but when you come to sell, it is classed as a business and capital gain tax applies...

So when/if. I sell the house it comes under cap gains?
I suppose there are ways around this, like changing back to domestic tariff, if you decide to sell?
Or am I being naive?

No. once you start getting the benefits of tax relief etc on your house... It stops being your residence..
So CGT will apply..
An office at home is different...
But You want it all ways... Tax relief and no tax....

 

[PrenticeBoyofDerry]

I asked the original question with regards to a phone call from an energy provider. I was offered the business tariff and their claim was I could claim 100% of the fuel cost on my tax bill.
I did ask if information was available to view on the internet or if they could send me mare details through the post, so I could take tome to study it.
Unfortunately the energy rep, informed me that the details were not available for view on-line and they had no details they could send out.
So I suggested a call back, once I had had chance to do a little research in to the pro/cons.
They never called back!

 

[geraint]

I asked the original question with regards to a phone call from an energy provider. I was offered the business tariff and their claim was I could claim 100% of the fuel cost on my tax bill.
I did ask if information was available to view on the internet or if they could send me mare details through the post, so I could take tome to study it.
Unfortunately the energy rep, informed me that the details were not available for view on-line and they had no details they could send out.
So I suggested a call back, once I had had chance to do a little research in to the pro/cons.
They never called back!

but the tax implications do not change..

What way do you want to go...