Home – New Forums Money matters Claiming Electricity – Running business from home

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  • #996777
    AVAV
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    Hi Guys,

    I run a Pty Ltd out of my office at home.

    I understand that I can claim a portion of my utility bills. The ATO states:

    • the cost of using a room’s utilities, such as gas and electricity – which must be apportioned between business and private use, based on actual usage.

    My two questions are:

    1) How do I apportion the bill?

    I have heard that this can be calculated by % of the square meter size of the business space vs personal living space. But I’m not certain if this is correct?

    While we onlly have one power connection coming into the property, I can measure the electricity that I use for the business via individual Power meters (I use a lot of electricity). Would this be the best method? And is it simply a matter of recording how much I use (say per quarter) and calculating this based off our KW/h rate?

    2) How do I pay the bill?

    Do I leave the electricity bill in our personal name, and the business pays the portion that it uses?

    Or do I put the electricity bill the business name, pay the business portion and pick up the rest personally?

    Or do I pay the full amount through the business and only claim what is used for business?

    Any clarification in this matter would be greatly appreciated! I clearly have no idea!

    Thanks in advance!

    Glen

    #1208979
    James Millar
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    Beware the adverse effect on your main residence exemption caused by running a business from home. It can be a very expensive lesson

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1208980
    AVAV
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    JamesMillar, post: 249096, member: 5318 wrote:
    Beware the adverse effect on your main residence exemption caused by running a business from home. It can be a very expensive lesson

    Thanks for your feedback James.

    I`m going to be completely honest. I don`t really understand what you`re saying.

    What is a `main residence exemption`?

    I`m currently residing in a rental if this impacts your comment? Which I think that it might?

    #1208981
    James Millar
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    AVAV, post: 249100, member: 99149 wrote:
    Thanks for your feedback James.

    I`m going to be completely honest. I don`t really understand what you`re saying.

    What is a `main residence exemption`?

    I`m currently residing in a rental if this impacts your comment? Which I think that it might?

    That’s fine. If you don’t have any ownership interest in the property (ie its a rental) then the main residence exemption is not an issue.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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