Accommodation & other expenses when staying away

[Graham]

Thanks everyone for your answers.

In answer to the question about usually residing at my parents whilst in contract, except for while I was renting a house yes I was. However that was my first contract and it lasted just short of 3yrs, so this one that I will be living away for is actually only my 2nd contract and will be the first time I live away from home for a contract.

Yeah so basically the big question is if HMRC will accept that my parents is my permanent residence as if they won't then it throws the rest out. I think its fairly easy for me to prove it is because all my belongings are here, my cat is here, company is registered to here, my bank accounts, cars, insurances etc etc, its just whether they get upset because I'm not paying anything to live here as their wording seems to imply you have to be paying something for it to be considered your permanent residence.

I'm not paying them anything at the moment, I could begin paying them under the rent a room scheme that's a good idea.
Although so far the only reason I've not been paying them anything is that I moved back in to save money (spending £1200 a month + bills renting a house wasn't really leaving me any capability to save some money to buy a house) and to buy a house as quickly as possible which isn't proving to be possible very quickly.

**Moany bit about house prices**...
I would already be living in my own house if prices hadn't gone up 30% in a year I was renting a house from July 2013 to July 2014 and hoping to buy it at the end of the tenancy, when I began renting it was valued around £275k, then by the end of the tenancy it was being valued at £340-360k which put it well out of my price range
I've got a budget of £250k to buy somewhere and am really struggling to find anything bigger than a shoebox around here hence still living with my parents rather than in my own house.

[Sausage Surprise]

Question(s)...
1 - Is it ok to withdraw cash from my business account to pay the rent? (I've never withdrawn cash from the account before so sorry if it seems like a silly question!)

Was in a similar position once so I paid a cheque from the company account (payable to me) into my personal account and then withdrew the cash from the personal account to pay to the house owner. The cheque from the company account gave the traceability and matched the receipt.

[Contreras]

Was in a similar position once so I paid a cheque from the company account (payable to me) into my personal account and then withdrew the cash from the personal account to pay to the house owner. The cheque from the company account gave the traceability and matched the receipt.

Whilst that would be acceptable I don't see how it helps vs. withdrawing cash direct from the company account. Also gives HMRC an excuse to ask for bank statements on your personal account.

[darrylmg]

It doesn't make much difference whether you pay for the accommodation directly from the business bank account or pay personally and expense it (i.e. reimburse yourself). It needs to be reported on your P11d in either case and you need to hold on to the receipt.

Ok, I'm not sure on this bit...
If you pay for travel accomodation directly from the company account, why does it go on your p11d?
Isn't it just a normal business expense?

[TheCyclingProgrammer]

Ok, I'm not sure on this bit...
If you pay for travel accomodation directly from the company account, why does it go on your p11d?
Isn't it just a normal business expense?

No, employee travel expenses have to be reported on a P11D regardless of who pays for it unless a dispensation is in place.

Paying for an employees travel is considered a business expense from YourCo's perspective and hence is tax deductible for corporation tax.

From an employees point of view, travel expenses are potentially a BIK which is why they are reported. It's down to the employee to claim tax relief for valid business travel on their tax return.

[Contreras]

Ok, I'm not sure on this bit...
If you pay for travel accomodation directly from the company account, why does it go on your p11d?
Isn't it just a normal business expense?

Because 'they' say so.

Employee travel - A tax and NICs guide for employers :

It applies to all employers who pay travel expenses whether:

• by reimbursing employees’ business travel costs
• by paying directly for business travel on behalf of employees, or
• by providing travel facilities for employees.

So, source of payment does not determine if an expense should be declared on P11D.

There is no tax to pay. It's a pointless exercise really, except I suppose HMRC want to be aware "just in case".

NW made a good post here.

Since it's a zero sum game, it is sometimes reasoned that travel expenses paid direct by the company do not need to be declared. If you take that view then by the same reasoning you might as well not bother declaring reimbursed expenses either. Personally I think any advice to "short-circuit" the P11D should always be qualified in that it is not what the rules say (whether HMRC actually care is another matter).

[TheCyclingProgrammer]

Easiest way to avoid the P11D and the associated self assessment double entry bollocks and inevitable tax code adjustment from HMRC is to apply for a reporting dispensation. It takes 5 minutes and the worst that can happen is it doesn't get approved.

Mine came through in a week.

[darrylmg]

No, employee travel expenses have to be reported on a P11D regardless of who pays for it unless a dispensation is in place.

Paying for an employees travel is considered a business expense from YourCo's perspective and hence is tax deductible for corporation tax.

From an employees point of view, travel expenses are potentially a BIK which is why they are reported. It's down to the employee to claim tax relief for valid business travel on their tax return.

Ok. Thanks for the explanation.

[Graham]

Sounds like it'd be worth having a try for a dispensation then, although I expect things to be fairly straightforward so might not make overly much difference in the end.

I've confirmed with the landlady now that I will transfer the money straight to her account from my company account so that's that one sorted Good to know about use of cash though for future.

Thanks for all the replies.