Accommodation Rental

**Clare@InTouch** · 12 April 2011, 15:05

If the expense is allowable then it reduces your profit, so you pay less tax. For example:

£40,000 income less £600 expenses = profit of £39,400. You pay CT at 20% of this.

If you're renting a flat and it's your only accomodation then you cannot claim the rent in full, instead you should look at claiming a use of home charge (this is a proportion of your bills based on time spent on business and space used).

If you have a home elsewhere and you're only renting in order to carry out this specific work then you may be able to claim the cost of the additional rental. It depends on whether you can justify it as being necessary.

**pmeswani** · 12 April 2011, 15:17

Originally posted by Clare@InTouch View Post

If the expense is allowable then it reduces your profit, so you pay less tax. For example:

£40,000 income less £600 expenses = profit of £39,400. You pay CT at 20% of this.

If you're renting a flat and it's your only accomodation then you cannot claim the rent in full, instead you should look at claiming a use of home charge (this is a proportion of your bills based on time spent on business and space used).

If you have a home elsewhere and you're only renting in order to carry out this specific work then you may be able to claim the cost of the additional rental. It depends on whether you can justify it as being necessary.

So, if my primary home location is in Location A, and I take up a contract in Location B, which requires me to temporarily relocate, whilst still retaining Location A as my primary base, I can claim the cost of the rent in Location B? If that is the case, would the whole rent be claimable, or just part of the rent? What about any of the other bills? (e.g. Phone bill, Internet Cost, etc.)

**Clare@InTouch** · 12 April 2011, 15:50

Originally posted by pmeswani View Post

So, if my primary home location is in Location A, and I take up a contract in Location B, which requires me to temporarily relocate, whilst still retaining Location A as my primary base, I can claim the cost of the rent in Location B? If that is the case, would the whole rent be claimable, or just part of the rent? What about any of the other bills? (e.g. Phone bill, Internet Cost, etc.)

If your sole reason for the second rent is because of business and it's necessary for you to incur the extra cost then you can claim it as a deduction in full, along with council tax and water rates:

HM Revenue & Customs: Living accommodation

It's a bit more complicated for heating & lighting and other costs, as described toward the bottom of the link above.

I would suggest you also need to ensure the cost is paid direct from the company, rather than claimed on expenses.

For 'phone bills and broadband bills then I'd say there is dual purpose and therefore it would be a benefit in kind unless you could show you're only claiming for the incremental business use (which in 'all inclusive' deals is usually zero).

**stek** · 12 April 2011, 16:20

Can you claim a reduction on CT on your first main place if you're only there say weekends?

**Clare@InTouch** · 12 April 2011, 16:27

Originally posted by stek View Post

Can you claim a reduction on CT on your first main place if you're only there say weekends?

Only for use of home, and if you're already claiming for a second business location then I think it would be difficult to argue it with HMRC.

The HMRC use of home guide rate is £3 a week - if you're in London (for example) for 5 days and claiming that rent then in theory the most you're doing from your home address is 2 days out of 7. Claiming for those 2 days as well would mean arguing to HMRC that you're a workaholic - not out of the questions obviously, but maybe not worth the argument for the sake of such a potentially small extra claim.

**stek** · 12 April 2011, 16:31

Originally posted by Clare@InTouch View Post

Only for use of home, and if you're already claiming for a second business location then I think it would be difficult to argue it with HMRC.

The HMRC use of home guide rate is £3 a week - if you're in London (for example) for 5 days and claiming that rent then in theory the most you're doing from your home address is 2 days out of 7. Claiming for those 2 days as well would mean arguing to HMRC that you're a workaholic - not out of the questions obviously, but maybe not worth the argument for the sake of such a potentially small extra claim.

I was thinking of the single person allowance of 25% assuming you;ve a partner living in the normal place of residence. If you're not there for most of the week is it not fair to claim it?

**SueEllen** · 12 April 2011, 16:34

Originally posted by stek View Post

Can you claim a reduction on CT on your first main place if you're only there say weekends?

If CT means council tax then no you can't.

As you have to pay full council tax on your main residence.

**SueEllen** · 12 April 2011, 16:36

Originally posted by stek View Post

I was thinking of the single person allowance of 25% assuming you;ve a partner living in the normal place of residence. If you're not there for most of the week is it not fair to claim it?

You won't be able to claim it.

As your main address* is where you partner is.

If you claim that the main address is the rental property then you can't claim the rent, council tax or other bills as business expenses.

*main address = main residence

**suri77** · 12 April 2011, 17:25

Originally posted by suri77 View Post

Simple question, looking for a smple answer...Have asked my accountant to explain several times but he has been very vague, which is worrying!

I have a contract which is vat registered and I want to find out how claiming the expenses work through a ltd company.

eg if I was to rent a flat for £600 a month, how is this broken down in my end of year accounts? I am pretty sure I do not get the full £600 back and that it is used as a tax break somehow. But my accountant has yet to explain how this works.

The other alternative is to house share (not my preference, but if it saves money then I will) this would cost around £350 a month.

Which is the money saving option? would there be much difference in my end of year accounts?

My contract earns around £40k per annum.

Is someone able to tell me whether my take home profit would be less or more for each circumstance above? i.e take home pay by taking the flat and take home pay by taking the house share?

Accommodation Rental