UK Businesses: Are you getting Mortgage Interest Relief on your Home Office?
The use of parts of residential properties for business purposes is growing and becoming more and more popular, particularly for small businesses. However, many business are not taking advantage of the mortgage interest relief on offer.
The interest relief comes into effect when a loan is taken out to acquire business and residential parts of a property. Interest on the loan to acquire the residential part qualifies for mortgage interest relief and interest on the business part can be allowed as a business deduction.
The business part has to be set aside for business purposes and the relief is calculated on a pro rata basis to the non business part of the property.
On a £200,000.00 mortgage, it could be possible to obtain £600.00 per annum relief.
It could be possible to back date a claim 6 years, if relief has not previously been claimed.
The business use of gas and electricity may also be entitled to relief.
For more detailed information and an explanation, visit “Specific deductions: interest: mortgage relief: mixed use of premises” on: www.hmrc.gov.uk/manuals/bimmanual/BIM45745.htm