Limited company and Subsitance

[ASB]

If you do it can be deemed that a percentage of your property is actually owned by your LTD Co (If you have a £1000/month mortgage and charge your LTD Co £500/month rent they will deem property is 50% owned by Ltd Co) and then if your LTD Co gets into trouble you can loose your house.

I would be curious to see anything to back up the ownership assertion. I am convinced it is a myth. [But it wouldn't be the first time I've been both convinced and wrong of course].

Where there is an issue is that you could lose your PPR relief which would prove costly on sale of the property. You could also get asessed for business rates - although there is no real evidence of the town hall trying this as yet.

In any event renting a home office is unlikely to lead to any tax savings - actually likely to increase it.

You will save CT but pay income tax instead - the rent-a-room scheme does not apply to this sort of letting. It would not be possible to allocate any of the mortgage interest against the schedule A income received.

So, yes never claim rent on a home office but for slightly different reasons.

In terms of rent here this was referring to rental of a property away from the main residence in order to fulfil the contract. This is generally a chargeable expense.

[RockyBalboa]

In terms of rent here this was referring to rental of a property away from the main residence in order to fulfil the contract. This is generally a chargeable expense.

Is it possible to do this combined with claiming mileage? For example, if renting a room 2 days per week but driving 3 days per week.

Thanks.

[ASB]

Is it possible to do this combined with claiming mileage? For example, if renting a room 2 days per week but driving 3 days per week.

Thanks.

Yes, but it all depends on individual circumstances. The client site must be a temporary workplace - check HMRC to try and decide if that is true in your case but I was entirely successul (and investigated which is the only time you really know) with claiming all mileage actually driven and the rent and I tended to return home midweek (so I claimed that too).

[Sockpuppet]

I claim for broadband. I also have a free dial up account that is for "personal use".

As the broadband also has e-mail, web and dev server (for a logistics guy I tend to end up wiritng a lot of perl/C programs to do small items - geocoding COG analysus mainly) so I tend to find that has enough to justify it.

[THEPUMA]

Subsistence/temporary workplace

I believe that if you are working somewhere that meets the definition of a temporary workplace, then the associated subsistence (lunch, coffee, etc) is tax-deductible and not a benefit-in-kind.

I can see no distinction in terms of tax legislation between an IT contractor working at a client's site and "normal subsistence" at any other temporary workplace.

I was concerned by some of the comments on here so I checked the legislation, HMRC manuals and booklets 480 and 490, none of which I found to be conclusive.

I therefore spoke to David Smith of Accountax. He said that he believed that it was allowable and that during the course of defending many cases, this issue had never been challenged.

I also spoke to the specialist HMRC units at Sheffield and Taunton who target contractor-related issues and both told me that they believed that such subsistence was allowable and would not challenge such a claim, provided it seemed reasonable (ie not lunching at The Ivy every day).

So I am pretty comfortable that this is the correct position.

Alan, Malvolio, you have both stated pretty categorically that such claims are not allowable. Am I missing anything?

Puma

[Bluebird]

I believe that if you are working somewhere that meets the definition of a temporary workplace, then the associated subsistence (lunch, coffee, etc) is tax-deductible and not a benefit-in-kind.

I can see no distinction in terms of tax legislation between an IT contractor working at a client's site and "normal subsistence" at any other temporary workplace.

I was concerned by some of the comments on here so I checked the legislation, HMRC manuals and booklets 480 and 490, none of which I found to be conclusive.

I therefore spoke to David Smith of Accountax. He said that he believed that it was allowable and that during the course of defending many cases, this issue had never been challenged.

I also spoke to the specialist HMRC units at Sheffield and Taunton who target contractor-related issues and both told me that they believed that such subsistence was allowable and would not challenge such a claim, provided it seemed reasonable (ie not lunching at The Ivy every day).

So I am pretty comfortable that this is the correct position.

Alan, Malvolio, you have both stated pretty categorically that such claims are not allowable. Am I missing anything?

Puma

Perhaps our esteemed collegues at SJD and Nixon Williams would care to comment...

[Lewis]

I believe that if you are working somewhere that meets the definition of a temporary workplace, then the associated subsistence (lunch, coffee, etc) is tax-deductible and not a benefit-in-kind.

I can see no distinction in terms of tax legislation between an IT contractor working at a client's site and "normal subsistence" at any other temporary workplace.

I was concerned by some of the comments on here so I checked the legislation, HMRC manuals and booklets 480 and 490, none of which I found to be conclusive.

I therefore spoke to David Smith of Accountax. He said that he believed that it was allowable and that during the course of defending many cases, this issue had never been challenged.

I also spoke to the specialist HMRC units at Sheffield and Taunton who target contractor-related issues and both told me that they believed that such subsistence was allowable and would not challenge such a claim, provided it seemed reasonable (ie not lunching at The Ivy every day).

So I am pretty comfortable that this is the correct position.

Alan, Malvolio, you have both stated pretty categorically that such claims are not allowable. Am I missing anything?

Puma

Nice work.

[ASB]

I believe that if you are working somewhere that meets the definition of a temporary workplace, then the associated subsistence (lunch, coffee, etc) is tax-deductible and not a benefit-in-kind.

.....

I also spoke to the specialist HMRC units at Sheffield and Taunton

Puma

Puma,

There is a bit here about overnight. http://search.hmrc.gov.uk/kbroker/in...sistence+lunch

And there is sort of a bit about lunch here.
http://www.hmrc.gov.uk/manuals/senew/SE31818.htm

And a bit about Quinn (involing lunch) here:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM37675.htm

Interestingly (?) the phrasing used "Where such costs are not deductible..." seems to imply that the costs might be deductible where the travel is not in a narrow radius.

You also mentioned speaking to Taunton. That was the office that dealt with my compliance review some years ago. Altohugh the period investigated was largely in the same radius etc the inspector made no attempt to disallow any subsistance which included (ho hum) flat rate claims for tea/coffee type incidentals and lunch (total 6 quid a day).

So, I personally think it is all as clear as a very opaque thing.

[simondolan]

Just looked in on this one - evidently I've missed all the fun.

My view is that there is a world of difference between claiming for the odd sandwich and coffee whilst on site, and systematically claiming up to what, £25 a day for lunch, evening meals, even breakfast I've seen touted about by the less than scupulous.

Look at the advice from the Revenue:

"would not challenge such a claim, provided it seemed reasonable "

Reasonable is not defined in tax statute, therefore it would be down to the Revenue to define what they consider reasonable.

Also, any claim would be subject to the "wholly and exclusively" rule - Revenue practice has no basis in law, so if they wanted to they could add back the entire amount and you would have no recourse.

The Revenue do and have changed their minds on many occasions over things like this, so to rely on a phone conversation with them is optimistic at best.

Perhaps our esteemed collegues at SJD and Nixon Williams would care to comment...

[THEPUMA]

Just looked in on this one - evidently I've missed all the fun.

My view is that there is a world of difference between claiming for the odd sandwich and coffee whilst on site, and systematically claiming up to what, £25 a day for lunch, evening meals, even breakfast I've seen touted about by the less than scupulous.

Look at the advice from the Revenue:

"would not challenge such a claim, provided it seemed reasonable "

Reasonable is not defined in tax statute, therefore it would be down to the Revenue to define what they consider reasonable.

Also, any claim would be subject to the "wholly and exclusively" rule - Revenue practice has no basis in law, so if they wanted to they could add back the entire amount and you would have no recourse.

The Revenue do and have changed their minds on many occasions over things like this, so to rely on a phone conversation with them is optimistic at best.

The reasonable comment was in the context of going to michelin starred restaurants every day so I don't think that that is something to be worried about.

I am not relying solely on a conversation with them (although in fact, David Smith's advice was also to make a note of the conversation and time, date and name of the person I spoke to and that this would be persuasive in the event of a future challenge). I have reviewed the relevant legislation and guidance and taken soundings from three experts in the area. On this basis I feel comfortable with the advice I have given.

As with many things, I guess it depends upon the client. Some will want to claim everything they are entitled to and some would prefer to be cautious and not claim anything that could possibly be challenged.

But I am now satisfied that there is no HMRC policy, particularly at the specialist units, that this stuff is disallowable.

Thanks ASB for the helpful post, BTW.