There are occasions where a property that is used for business purposes has a private use element, such as in a guest house for example.
In the past calculating this private use disallowance of the total expenses may have involved some detailed calculations to ensure a fair split, however going forwards the process has been made much simpler with a range of fixed rates available from HMRC.
The rates are calculated depending on how many owners of the business are living in the premises:
For one owner the private use rate is £350 per month.
For two owners the private use rate is £500 per month.
For three or more owners the private use rate is £650 per month.
These new rates apply from 1st April 2013, and cover all premises costs such as heat & light, rates/insurance, maintenance, etc.
