Advice on paying rent whilst on a contract away from business address

[ribble]

Deduction for business expenses
Deduction for business expenses

21.23 Where the accommodation provided is simply a home for the employee and his or her family,
the question of any deduction under the expenses rule described in Chapter 7 does not arise.
Where the employee is necessarily obliged to use part of the property exclusively for business,
the expense of such use may be deducted in arriving at the tax charge. For example, there may
be circumstances in which part of the accommodation has to be reserved for business purposes,
such as a showroom. In these cases, an appropriate deduction may be given for tax purposes.

21.24 If accommodation is provided for an employee, for example, in a flat or hotel, while the employee
is on business duties away from his or her home and normal place of work, the cost of this may
be allowable as a deduction under the expenses rule. For example, a company in Yorkshire may
rent a London flat for an employee who has to make frequent business trips to London. The extent
of any deduction will depend upon the circumstances. If the accommodation is no more than an
alternative to hotel accommodation and is not available for private occupation the whole cost
of renting and running the flat may be allowed as a deduction. On the other hand, if the employee
or his or her family also had the use of the flat as a private residence any allowance would
be restricted.

21.25 If, however, a London flat is provided for an employee whose job is in London and the flat is
used by the employee as a pied à terre no allowance would be due. Equally, if the flat is used
by the employee or the employee’s family as their only or second home, no deduction for tax
purposes would be due.

Apparently its the last paragraph from here thats relivant http://www.hmrc.gov.uk/guidance/480_chapter21.pdf

Anyone care to comment?

[blacjac]

I would say you are not using it as a pied à terre, so your accountant is wrong. Not based in Wakefield by any chance is he?

Dictionary of Difficult Words - pied-à-terre

[Clare@InTouch]

I would agree with Blacjac. If you're using it purely for business, and the only reason you're renting it is to be close enough to the client site to do the job, then it's business related and allowable.

If you're renting it so that you have a bolt hole in the City and you use it for personal reasons such as somewhere to stay after a night out on the town then I'd see the point about it being a benefit in kind.

[Ken Adams]

still confused...

hi all,

i'm looking into this at the moment and whilst the above links seems to suggest my rent can be exempt from tax, i have found this article on HMRC's website:

http://www.hmrc.gov.uk/helpsheets/hs202.pdf

Page 2 states that most company directors cannot claim exemption.

so, i'm back to square one and not sure if I can claim part, all or none of my rent.

My home is cheltenham, my contract is in london so i have rented a place here that i often stay at over the weekends. My girlfriend lives with me, but she is studying so not working.

any advice would really help

thanks

[TheFaQQer]

My home is cheltenham, my contract is in london so i have rented a place here that i often stay at over the weekends. My girlfriend lives with me, but she is studying so not working.

Is it wholly and exclusively for the business and has no personal benefit?

Doesn't sound like it to me, so it's not a business expense. If it was just you, then you could pro-rata the personal use and claim 4/7 for the nights you need it for work, but since your girlfriend is also there I can't see how you could justify it as wholly a business expense.

[darrylmg]

My home is cheltenham, my contract is in london

I live in Cheltenham to (when I'm not working abroad).
If I get a contract in London next year, I'll give you a shout.
If we boot out your other half, we can split the travel costs and the rent...

[Wanderer]

http://www.hmrc.gov.uk/helpsheets/hs202.pdf
Page 2 states that most company directors cannot claim exemption.
so, i'm back to square one and not sure if I can claim part, all or none of my rent.

My home is cheltenham, my contract is in london so i have rented a place here that i often stay at over the weekends.

My reading of the reference you give is that it applies when a company provides accommodation which is the main or only residence for the employee.

Provided you still have your primary residence (ie, you haven't rented it out or something) then you can claim that this is just a temporary accommodation for use while working in London. Even if you stay there the odd weekend, you could potentially argue that this weekend use is merely incidental to the business use.

Having your girlfriend living there with you might be problematic though.

[Contreras]

Point your accountant at this and see what they have to say:

In many cases furnished or unfurnished accommodation is obtained as a cheaper and more convenient alternative to hotel accommodation. Provided that the total cost of the accommodation is appropriate to the business need and is reasonable and not excessive you should permit relief in full. The total cost may include the reasonable cost of furniture where that is properly attributable to the business travel. The cost should be accepted as reasonable where the total cost of providing accommodation does not exceed the cost of hotel accommodation of an appropriate standard. You should only restrict relief in extreme cases.

You may need to restrict relief in those cases where the standard of accommodation provided does not result from the need to provide the employee with necessary accommodation while at a temporary workplace. For example, if accommodation is supplied in part because the employee is accompanied by his or her family, or the location of the accommodation is determined by reasons of non-business convenience and there is an increase in costs as a result, relief ought to be restricted. It cannot be assumed that accommodation of a similar standard to the employee's home will always be reasonable.

Relief should not be restricted for furnished or unfurnished accommodation that is of reasonable cost where it is also able to be used by the employee for weekends, short holidays during the period of work at the temporary workplace, or other short non- working periods. Relief should be restricted where significant non-business use is part of the purpose of providing the accommodation.

Linky here - Travel expenses: general: scale of expenditure: accommodation

ps. Clare, the link you posted is broken.