Charging rent to my limited company
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    Default Charging rent to my limited company

    Hi,

    I will be starting a contract in London and I live too far away to commute on a daily basis. I am considering buying a flat. This would not be my main residence or where the business is registered. Would I be able to rent the flat to my limited company as it will be used as business based accommodation? If I am allowed to do this, would this require a specific buy to let mortgage?

    Thanks in advance

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    Quote Originally Posted by Smokebill View Post
    Hi,

    I will be starting a contract in London and I live too far away to commute on a daily basis. I am considering buying a flat. This would not be my main residence or where the business is registered. Would I be able to rent the flat to my limited company as it will be used as business based accommodation? If I am allowed to do this, would this require a specific buy to let mortgage?

    Thanks in advance
    Very little to gain from doing so, as you would pay personal tax on the rental income.

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    Quote Originally Posted by teapot418 View Post
    Very little to gain from doing so, as you would pay personal tax on the rental income.
    Hi - could income tax on rental income not be mitigated by claiming mortgage interest and other expenses?

    Thanks,

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    Big changes to BTLs coming up with no mortgage interest and wear and tear not allowed. Needs looking at carefully to work that out.

    Bit that aside OPs question is so basic he's going to understand a lot more about contractor expenses in general before going down this route.
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    What I did (and yes it passed investigation) was:-

    - Bought house
    - Expensed equivalent to Mortgage Interest, Council Tax, Utility Bills
    - Charged 10 overnights
    - Declared 500/annum BIK for private use. Family came up a few times

    No declaration of personal SATR.

    HMIT was OK, both from company and personal perspective.

    Should he have been? Not sure, the argument I used was it was cheapest most cost effective way. But with reflection I should probably have been declaring income equivalent to Council Tax and Utility Bills. Interest was of course chargeable.

    I suspect the answer may be different if investigated now.

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    ASB - did you buy through YourCo? Assuming you did due to BIK charge.

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    Quote Originally Posted by TheCyclingProgrammer View Post
    ASB - did you buy through YourCo? Assuming you did due to BIK charge.
    No, it was bought personally with a large mortgage (reallocating where debt was). The bik was agreed with hmit in the investigation as a reasonble estimate of the value of personal use as a result of staying there odd weekend etc. Feel free to pm if you want further details.

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    Quote Originally Posted by ASB View Post
    What I did (and yes it passed investigation) was:-

    - Bought house
    - Expensed equivalent to Mortgage Interest, Council Tax, Utility Bills
    - Charged 10 overnights
    - Declared 500/annum BIK for private use. Family came up a few times

    No declaration of personal SATR.

    HMIT was OK, both from company and personal perspective.

    Should he have been? Not sure, the argument I used was it was cheapest most cost effective way. But with reflection I should probably have been declaring income equivalent to Council Tax and Utility Bills. Interest was of course chargeable.

    I suspect the answer may be different if investigated now.
    Thanks ASB - this seems a sensible approach.

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    Quote Originally Posted by Smokebill View Post
    Thanks ASB - this seems a sensible approach.
    I have come across a company that will allow me to put the mortgage in the limited company name. This gets around the problem of having to charge expenses back to the company and also would mean I could continue to deduct mortgage interest and other expenses when renting the property. Interest rates are in line with residential mortgage deals.

    Anyone have any experience of this?

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