Private use of business premises?


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.

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