I understand the principle of splitting shared expenses between personal and business, i.e. rent+bills of the home office, internet, phone, transportation etc. But I’m not sure how to record the transactions correctly in Manager! Here’s what I’ve been doing:
Rent+bills: paid monthly (£1200). I live with my wife in a 1 bedroom flat, split into 3 sections (living room, bedroom and kitchen/utilities). I carry out my work (I’m a market analyst) from the living room (avg. 4 hours per day, which is 25% of the time spent in the living room). So the business related proportion is as follows:
£1200 ÷ 3 sections x 25% working time = £100
And I record this in Manager as follows:
Bank account > Spend Money > Payee: Landlord >
Account (line 1) > Rent = £100
Account (line 2) > Drawings = £1100
Question 1: is this the right way of recording this transaction?
Question 2: am I being reasonable with the £100 calculation? knowing that i.e. the simplified expenses method (as per HMRC) dictates that I cannot claim more than £26 per month.
Internet bill > same as above (25% of the time on business) > same way of recording on Manager.
Mobile Phone + Transportation > As I use cash basis > I use actual records (download statements from TFL (oyster) and my mobile line provider) and mark business related calls/trips. I record this in Manager as follows:
1- Expense claim > Payer: “Me” > Payee “Oyster - TFL” > Account: "Transportation"
2- Bank account > Spend Money > Payee: ?? >
Account (line 1) > Expense Claim = £ cost of business trips
Account (line 2) > Drawings = £ cost of personal trips
So, do you think I’ve got it right?
Sorry for the lengthy post, but this seems to be a tricky topic and I didn’t find a sufficient answer on the forum. Thanks in advance for your help.