Use of Home expense

[AW88]

I'm quite sure I'm being thick here...

How would one enter the £2 a week 'Use of Home' allowance into Kashflow?


Thanks in advance

[DFL]

I would suggest that you either

1. Debit the rent account
2. Set up a new account 'premises costs' and debit that (make sure that you link it to the profit and loss account when setting it up)
or
3. Don't bother and get your accountant to make the entries at year end.

Depending on nature of your business, type of entity and mortgage interest that you are paying you may be able to claim in excess of the £2.00 per week so I would advise number 3.

Hope that helps.

[AW88]

Hi DFL

Thanks for taking the time to answer, but I really ought to have elaborated more in the original post - was doing that in a bit of a rush and lost in my own thoughts!


Firstly, things like mortgage and bills are irrelevant... long story I don't wish to go into, but I pay a fixed sum for my house each month and someone else pays the mortgage and bills. Sticking to the £2 a week is the most suitable solution for us and I am happy with it.

My problem is, where do the payments come from? Obviously, I need to debit some form of premises account, but it is not a 'receipt' on the Purchases section.

If I were to do a journal entry, where does the corresponding Credit go to?

Hope that explains it a bit better.

[DFL]

Hi

If you are a sole trader then by journal entry the corresponding credit would go to Capital Introduced, if you are a limited company then credit the Directors Loan (or Current) Account.

[AW88]

Yes, that makes sense. Many thanks DFL.

[vincenzo]

Apologies for bringing up this old question.

What is the recommended chart of accounts code to use for renting a room from your own home for Ltd companies?

Also, Capital Introduced, where a director loans to the Ltd company?

I've searched a little, but this was the only forum post on this subject I could find.

Many thanks,

- Vincent (KashFlow noob).

[vincenzo]

Shame that this forum isn't more active. :-(
The blog comments get more action, but that is not a very good place to ask questions and search for solutions.

Shame, because this software is good and deserves a more active community.

From a business perspective:
* Active forums reduce support calls

* Active forum communities normally result in more sales of the software too.

Maybe someone in the KF team can take this on as a project.
Tip: When you add a post on the blog that would benefit further user discussion, create a forum topic for it and post a link to it from the blog post.

A couple of examples from the more recent blog posts would be:

How we develop KashFlow and what happens to your suggestions

Should a basic business use just a spreadsheet for their accounts?

Thank you forlistening.

- Vincent

[PatrickJohnson]

Hi Vincent,

Thanks for your thoughts,

I completely agree. Over the coming weeks you should see the forum more actively promoted (hopefully) and monitored more regularly as i free up time to be able to take it on as a project rather than an ad-hoc thing.

[alleking]

Hi Vincenzo
We set our Kashflow clients' chart of accounts up to code the director loan account at 830 and Use of home at 101, purely as these correspond to our accounts production software. The codings themselves are arbitrary, the key thing being to ensure the Director loan account sits within liabilities in the balance sheet, and use of home within expenses on p&l.

Remember too that directors receiving rent from the limited company need to declare it in the property pages of their personal return - ie depending on your personal situation this transaction can sometimes work against you.

[hrbs.biz]

Hi

We have a guide on what can be claimed and free rental agreements to download at http://hrbs.biz/id?10108 .

Hope this is useful.

Regards

Keith
HRBS.biz