Rented accommodation

[JB3000]

Links

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.

Relevant links for anyone who is interested:

Travel expenses: general: scale of expenditure: accommodation

Travel expenses: general: scale of expenditure: accommodation and subsistence: examples

It does appear that, assuming a one bed flat is being rented whilst the main residence is being kept, relief should be permitted in full for the costs actually incurred. This appears to be in keeping with S.338, ITEPA 2003 and HMRC guidance, i.e. no income tax and Class 1A NIC would be due on the cost of the temporary accommodation.

[TheFaQQer]

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.

If the employee is on secondment, then there is always the expectation that the arrangement is temporary. If a contractor moves their family into "temporary" accommodation, then there is a good case for HMRC to argue that it isn't temporary, it's a permanent move because the base has changed - therefore accommodation and travel expenses would not be claimable.

[TheFaQQer]

Relevant links for anyone who is interested:

Travel expenses: general: scale of expenditure: accommodation

Travel expenses: general: scale of expenditure: accommodation and subsistence: examples

It does appear that, assuming a one bed flat is being rented whilst the main residence is being kept, relief should be permitted in full for the costs actually incurred. This appears to be in keeping with S.338, ITEPA 2003 and HMRC guidance, i.e. no income tax and Class 1A NIC would be due on the cost of the temporary accommodation.

The key word being "temporary".

[JB3000]

If the employee is on secondment, then there is always the expectation that the arrangement is temporary. If a contractor moves their family into "temporary" accommodation, then there is a good case for HMRC to argue that it isn't temporary, it's a permanent move because the base has changed - therefore accommodation and travel expenses would not be claimable.

If a contractor is working because of a short term contract, then there is always the expectation that the arrangement is temporary. If a contractor keeps his principal private residence, returns to this on the weekend, then there is a good case for the contractor to argue that the flat is temporary accommodation, because their permanent base is their principal private residence - therefore accommodation and travel expenses would be claimable (in the same way secondment- i.e. working somewhere else temporarily- is claimable).

[Contreras]

If a contractor is working because of a short term contract, then there is always the expectation that the arrangement is temporary. If a contractor keeps his principal private residence, returns to this on the weekend, then there is a good case for the contractor to argue that the flat is temporary accommodation, because their permanent base is their principal private residence - therefore accommodation and travel expenses would be claimable (in the same way secondment- i.e. working somewhere else temporarily- is claimable).

You can say that if you like.

Or, the contractor and his partner now have two permanent residences, a city pad and the country retreat.

The 'intent' is hard to prove. HMRC can just disallow it and then vigorously defend their position at tribunal because of the potential to set a precedent.

[JB3000]

You can say that if you like.

Or, the contractor and his partner now have two permanent residences, a city pad and the country retreat.

The 'intent' is hard to prove. HMRC can just disallow it and then vigorously defend their position at tribunal because of the potential to set a precedent.

In wholly and exclusively cases what matters is the purpose of the expenditure and not the payer’s motive so I am not sure why "intent" would have to be proved. The purpose would be proved by returning to the principal private residence on the weekends and moving out of the temporary accommodation once the contract is over:

BIM37075 - Wholly and exclusively: how to establish purpose: distinction between ?purpose? and ?motive?

Assuming the purpose of the accommodation was for the contract and it is temporary then relief should be permitted in full for the costs actually incurred where the accommodation is of an appropriate standard:

Travel expenses: general: scale of expenditure: accommodation

The fact that his girlfriend stays over does not take away from the purpose of the temporary accommodation which is living closer to the temporary workplace.

[eek]

In wholly and exclusively cases what matters is the purpose of the expenditure and not the payer’s motive so I am not sure why "intent" would have to be proved. The purpose would be proved by returning to the principal private residence on the weekends and moving out of the temporary accommodation once the contract is over:

BIM37075 - Wholly and exclusively: how to establish purpose: distinction between ?purpose? and ?motive?

Assuming the purpose of the accommodation was for the contract and it is temporary then relief should be permitted in full for the costs actually incurred where the accommodation is of an appropriate standard:

Travel expenses: general: scale of expenditure: accommodation

The fact that his girlfriend stays over does not take away from the purpose of the temporary accommodation which is living closer to the temporary workplace.

Why do we now have a second poster arguing over a point we've already debated. The only question here is when does the second property become (in HMRC eyes) a base.... And remember a base does not have to be 7 days a week it may just be a second home...

[JB3000]

Why do we now have a second poster arguing over a point we've already debated.

This is a public forum so why not? Try not to get too upset.

From a W&E point of view, the accommodation is temporary for the purposes of contracting.

[cojak]

Yes, this is a public forum, so any readers will just have to read the HMRC website and decide on their own level of risk.

It's not us who have to pick up their tax bill.

[eek]

This is a public forum so why not? Try not to get too upset.

From a W&E point of view, the accommodation is temporary for the purposes of contracting.

But probably not on the secondary (is it a base) point once Girlie starts using it...