Rented accommodation

[sal]

If you are going to have rant when your attitude to your company finances is so flippant at least try a bit harder to make it a good one. Remember the ones that actually agree with you aren't going to be stupid enough to do it on an internet forum.

You can only make assumptions about my attitude towards my company finances, as you don't have access to my books. Nor do i claim to know yours, that's why i don't make personal accusations/claims. I was just laying down the facts that 90% of the contractors are breaching the HMRC guides when it comes to expenses and most of them are getting away with it. Some to a larger extend, others not so much and no, i don't expect confessions in a public forum.

I did not advise the OP in favor of putting the accommodations as expense giving the circumstances, for obvious reasons. But i didn't try to depict myself as the Avatar of Virtue either.

[dezze]

Yes, and the question has nothing to do with HMRC Scheme Enquiries, it is an accounting question. I moved it to ensure accountants answer it.

It was in the HMRC Scheme Enquiries forum and I said it should be moved. It has.

[northernladuk]

You can only make assumptions about my attitude towards my company finances, as you don't have access to my books.

Your postings seem to give us a fairly good idea (rightly or wrongly) Can't blame us for making an assumption on them.

Nor do i claim to know yours, that's why i don't make personal accusations/claims.

Yes you are. The 'Holier than thou' comment?

I was just laying down the facts that 90% of the contractors are breaching the HMRC guides when it comes to expenses and most of them are getting away with it. Some to a larger extend, others not so much and no, i don't expect confessions in a public forum.

90% is a fact? Really? And you kind of shoot yourself in the foot by admitting 'MOST' are getting away with it. You still think advocating doing something because HMRC won't find out is a good idea when you yourself admit only most are getting away with it. OP is gonna really thank you for your input if he is not one of the most.

I did not advise the OP in favor of putting the accommodations as expense giving the circumstances, for obvious reasons. But i didn't try to depict myself as the Avatar of Virtue either.

Maybe you didn't but you certainly gave the impression it was acceptable to try and get away with it because you won't get caught.

[eek]

You can only make assumptions about my attitude towards my company finances, as you don't have access to my books. Nor do i claim to know yours, that's why i don't make personal accusations/claims. I was just laying down the facts that 90% of the contractors are breaching the HMRC guides when it comes to expenses and most of them are getting away with it. Some to a larger extend, others not so much and no, i don't expect confessions in a public forum.

I did not advise the OP in favor of putting the accommodations as expense giving the circumstances, for obvious reasons. But i didn't try to depict myself as the Avatar of Virtue either.

The thing you miss is that I wasn't holding NLUK, theFAQQER or myself up as avatar's of virtue, instead I was pointing out that we all have fairly conservative views on what you can claim.

As for your other comments I'll just say +1 to NLUK's comments above.

[TheFaQQer]

I was just laying down the facts that 90% of the contractors are breaching the HMRC guides when it comes to expenses and most of them are getting away with it.

And the source for the fact that 90% of contractors are breaching HMRC guides when it comes to expenses is?

[lukeyh]

Hi guys,

Thanks for the replies and the useful debate this seemed to have caused : )

I think the various points made have helped me form an opinion : a grey area that may fail under scrutiny. I will make a decision with the accountant about what I do next. . . . Probably after seeing how the living arrangements works out in reality.

[sal]

The thing you miss is that I wasn't holding NLUK, theFAQQER or myself up as avatar's of virtue, instead I was pointing out that we all have fairly conservative views on what you can claim.

As for your other comments I'll just say +1 to NLUK's comments above.

Must have hit a nerve, for all of you to come down crashing over me. It wasn't my intention to offend anyone, so please accept my apologies.

And the source for the fact that 90% of contractors are breaching HMRC guides when it comes to expenses is?

Personal observation and opinion based on conversation with other contractors. Mostly breaching the 24m rule when it comes to travel/meals expenses.
YMMV

Now back to the original topic. I can't see why having his GF over is going to be disallowed.

The OP clearly states that it's a 12m contract that will require for him to get a temporary accommodation in London, while retaining his home. If it wasn't for the said contract he wouldn't have the need to rent the said accommodation - here is your wholly and exclusively. He is not renting the flat so he can spend nights at the West End, nor for his GF to have place to live in London. The purpose is to allow him to work on the contract.

But an expense is not disallowed by S34(1)(a) ITTOIA 2005 (for unincorporated businesses) and S54(1)(a) CTA 2009 (for companies) because the trader (or third party) obtains an incidental or personal benefit provided that it was not part of the purpose in incurring the expense to secure such benefit.

So in this case the added benefit of spending a weekend over in London using the accommodation or having his GF staying over is an incidental added benefit of renting the accommodation, not the reason.

Case law where people were found guilty for renting larger hotel rooms to accommodate family members IMO don't apply here as large room is more expensive than small room. Where 12m flat rent is much cheaper than hotel and makes business sense.

That being said i would advise the OP to consult with experts on the matter, as the area is a bit grey.

[eek]

Must have hit a nerve, for all of you to come down crashing over me. It wasn't my intention to offend anyone, so please accept my apologies.

No you didn't hit a nerve, I was merely stating where our viewpoint comes from

Now back to the original topic. I can't see why having his GF over is going to be disallowed.

The OP clearly states that it's a 12m contract that will require for him to get a temporary accommodation in London, while retaining his home. If it wasn't for the said contract he wouldn't have the need to rent the said accommodation - here is your wholly and exclusively. He is not renting the flat so he can spend nights at the West End, nor for his GF to have place to live in London. The purpose is to allow him to work on the contract.



So in this case the added benefit of spending a weekend over in London using the accommodation or having his GF staying over is an incidental added benefit of renting the accommodation, not the reason.

Case law where people were found guilty for renting larger hotel rooms to accommodate family members IMO don't apply here as large room is more expensive than small room. Where 12m flat rent is much cheaper than hotel and makes business sense.

That being said i would advise the OP to consult with experts on the matter, as the area is a bit grey.

You utterly ignore the second criteria HMRC use which is that if a location becomes a "base" expenses are no longer claimable. And girlie changing work location to London is going to make arguing that second point impossible.....

[northernladuk]

Must have hit a nerve, for all of you to come down crashing over me. It wasn't my intention to offend anyone, so please accept my apologies.

Not hitting a nerve, just hard nosed discussion. Can't see why you think taking a gung ho attitude to expenses when trying to help a newbie isn't going to attract some tough attention though.

Personal observation and opinion based on conversation with other contractors. Mostly breaching the 24m rule when it comes to travel/meals expenses.
YMMV

Oddly enough I find exactly the opposite is true. Nearly everyone I know is happy to stick to the 24 month rule. Plenty of other stuff they fly close to the wind with and I don't always agree but still, I don't find the same as you at all. There are those that don't understand it I agree but they don't consciously go out to breach it.

And we are supposed to take these fact and figures in to account based on that?
Now back to the original topic. I can't see why having his GF over is going to be disallowed.

The OP clearly states that it's a 12m contract that will require for him to get a temporary accommodation in London, while retaining his home. If it wasn't for the said contract he wouldn't have the need to rent the said accommodation - here is your wholly and exclusively. He is not renting the flat so he can spend nights at the West End, nor for his GF to have place to live in London. The purpose is to allow him to work on the contract.

He doesn't say she is staying over. She will be using it as her base location to do her permanent job.

So in this case the added benefit of spending a weekend over in London using the accommodation or having his GF staying over is an incidental added benefit of renting the accommodation, not the reason.

Case law where people were found guilty for renting larger hotel rooms to accommodate family members IMO don't apply here as large room is more expensive than small room. Where 12m flat rent is much cheaper than hotel and makes business sense.

Maybe you need to re-think your opinions. You don't think case law applies just because something is cheaper? Just Ludicrous. HMRC and legislation don't do business sense.

You are also missing all the previous comments, particularly the one in NW's guides saying don't take family. They aren't saying that just to pad their brochure out a bit.

[Beansontoast]

Was looking into this. . .

Found the following example on HMRC website:

# # #
Example 3
An employee of a German company is on secondment at a temporary workplace in the UK for 18 months. She is provided with a four bedroom house for herself, her husband and two children. A single employee in equivalent circumstances would only have been provided by her employer with a two bedroom flat.

On these facts part of what the employer provides is not a necessary expense attributable to the travel by the employee. Part of the accommodation is attributable to the accompanying family. Relief should be limited to the provision of a two bedroom flat, see EIM31836.

# # #

So having family in the rented Accom did not deem it an inappropriate expenses, but rather any cost above that required solely for business should be excluded from the tax relief. Thus : assuming the accommodation is appropriate for an individual, is temporary and the primary home is retained, I see no reason why HMRC would care if the girlfriend also makes use of the accommodation.

Just a point of view.