Accommodation whilst working

[Ted]

Hi,

I've got a contract which requires a 1 hour commute each way daily to their office - it's part of the contract that the work is done on site in a secure environment.

The commute is killing me and my car - as well as adding 10+ hours onto my working week. I'm now considering getting accommodation closeby to the office as I'll be able get a better standard of life by doing so (single, so no family to keep me at my registered company address).

As someone who is new to contracting I was wondering if it was possible to put the cost of the accommodation through my company books and thereby get some tax benefits through it.

Even if it was equivalent to transferring the equivalent of the mileage allowance, I'd be very happy.

Is there anything I can do in relation to accommodation to put it through the books and if so, does it have to be a certain type of accommodation - i.e. a sole rent agreement for a flat/house or can it be for a room in a house share, etc?

I'll be speaking to my accountant about this sometime, but I'd like to get some prior information before I broach the subject with him.


Any advice greatly appreciated.

Thanks.

[Ted]

Okay, apologies - I've done some digging about this site and it would appear that I can put this through the books if I only stay there Mon - Fri, even if I pay for Sat & Sun.

[Ted]

I've just read elsewhere that this is allowable if the is claimed for only Mon - Fri - i.e. I commute from my main address on Monday and then back on the Friday. There appears to be no allowance for staying there over the weekend and claiming 5/7 days as it appears to become main residence.

What happens if you are requested to work over weekend - I presume this is then allowable to put the additional days through the books.

When I put the rent through the company books, what relief does the company obtain on it in percentage terms?

I'm looking at a roomshare @ £350pcm, but if my company could recoup enough to warrant a studio apartment or likewise it would be ideal instead of sharing.

Apologies, I'm new to contracting and still getting my head around all these things.

Thanks.

[cojak]

No problem Ted, it's not often that OP's answer their own questions.

Have a look at airbnb or sparerooms - I've used sparerooms and I have friends who use airbnb for this kind of Mon-Fri accommodation.

[northernladuk]

Question for you. How many clients are you going to be able to contact with that are less than an hour? I find staying away all week worse than an hour either way commute. I've not been at a client yet that's less than an hour and many permies I know do that, particlularly the ones working in city centres. An hour commute doesn't stike me as being a lot but it's your money I guess.

Remember it's still coming out of your pocket at the end of the day albeit with a discount.

[ctdctd]

An hour commute doesn't strike me as being a lot

Depends on the person and their circumstances - when I started contracting, I did a couple of gigs travelling round the M25 with 3 hours a day commute. Also did 2.5 years going into that London on a coach - again 3 hours daily.

Not any more - 2 hours plus a day means I find somewhere to stay. If not, I turn into a zombie like all the commuting permies appear to be!

To the OP, if you are outside IR35, you can put accommodation through as expenses.

[Ted]

I'm based in out the country, but so far, my clients are in the same city. It is 1 hr travel each way mostly congested roads meaning a very early start to avoid - and then the question of leaving early or late to avoid the same on the homeward route. Plus, coming into the long dark winter nights I think it would be highly beneficial to avoid this journey. This is all before brining quality of life into the equation.

Of the 10 hours this adds to my working week, even if I only worked for an additional 3 hours, it would increase my income (probably even cover the price of the rental) and still give me 7 hours extra downtime - I don't see what's not to gain from it.

In terms of taxes etc, what way does my company process this £350pcm? I'm not sure here and would like to know.

EDIT: If I get a room through a site like spareroom.co.uk etc. it is highly unlikely that the provider will be in a position to offer receipts - as they are just people letting out rooms in their houses. Does this have an adverse effect on putting it through expenses or how is this handled?


Thanks.

[ctdctd]

In terms of taxes etc, what way does my company process this £350pcm? I'm not sure here and would like to know.

EDIT: If I get a room through a site like spareroom.co.uk etc. it is highly unlikely that the provider will be in a position to offer receipts - as they are just people letting out rooms in their houses. Does this have an adverse effect on putting it through expenses or how is this handled?


Thanks.

You pay personally and claim the cost as your expenses from YourCo.

You will need some sort of receipt to justify the expense to both YourCo and HMRC.

[northernladuk]

Be wary of the 24 month rule though. This is a client in a new area or in the same area as your last ones?
If you have issues with how to expenses your accountant is your best bet.

[Ted]

Thanks - I'll definitely be speaking to my accountant. I'm only been contracting for a few months now so I just want to understand things before I go and get bombarded with accountacy lingo.

I suppose at a stretch, I could get a receipt book for the landlord and get them to fill it in for me. Hopefully that would suffice.

I presume my company would be able to 'save' 20% of the rent when tax is due to be paid?