Relocation Rent expense

[Im thus]

I am looking to relocate to another city to work, from Scotland to London. I was told by my accountant I can claim my rent through my company subject to the 24month rule. I have read some conflicting advice on the internet.

When I do plan to move I plan to stop renting in my current location. Until I decide to move back or will permanently move to london. Can I give up my place in Scotland and still pay accommodation rent and bills etc through my company when I relocate for work?

[LisaContractorUmbrella]

I am looking to relocate to another city to work, from Scotland to London. I was told by my accountant I can claim my rent through my company subject to the 24month rule. I have read some conflicting advice on the internet.

When I do plan to move I plan to stop renting in my current location. Until I decide to move back or will permanently move to london. Can I give up my place in Scotland and still pay accommodation rent and bills etc through my company when I relocate for work?

If I understand you correctly, you plan simply to move from one location to another - you will only be paying rent on one property? If this is the case then you will not be able to claim rent and bills as you will have no additional costs as a result of the contract.

[Clare@InTouch]

Absolutely agree with Lisa, but just to add that you can claim a small amount for use of home based on the additional costs of running your business from home. The amount will depend on the actual additional costs, logically calculated, or the HMRC rate of £4 a week.

[northernladuk]

The key here is you can claim temporary accommodation. Having no permanent place to live then naturally your digs near your gig will become your permanent location.

[TheCyclingProgrammer]

Agree with all the above. There are two provisions for claiming accommodation as an expense:

* Within the scope of living accommodation rules, which are quite restrictive and unlikely to apply to most contractors:
HM Revenue & Customs: Living accommodation

* Within the scope of accommodation/subsistence allowances for business travel, including travel to a temporary workplace (24 month rule applies).

Within the scope of the above, renting an apartment - so long as it cannot be construed as your permanent residence - is normally allowable. The reasoning behind this is that businesses should not be penalised for choosing to rent a flat if its more cost effective than staying in a hotel. On that basis, a good rule of thumb (but not definitive) is: if you would have had to stay in a hotel, then as long as it costs the same or less, flat rental would probably be allowable.

As in your situation it would probably be your primary residence, it probably wouldn't be allowable.

[kingcook]

Move back in with your Mum/Dad/friend in Scotland. That will be your permanent residence.

The place you rent in London will be temporary.



EDIT: Didn't read properly, ignore my advice.

[mudskipper]

Travel expenses: general: accommodation and subsistence: subsistence costs that are not attributable to the travel: no permanent home: examples

See example 1:

An employee performs the duties of her employment at a series of temporary workplaces. She has no permanent home. She stays in guest houses and hotels near wherever she happens to be working. This is the only accommodation available to her.

She has to live somewhere and the costs of accommodation are attributable to her general need for shelter, rather than her attendance at a particular workplace. Her travel is between her temporary accommodation and her temporary workplace. The cost of accommodation is not attributable to the cost of that travel. She is not entitled to a deduction for the cost of this accommodation.

She is entitled to a deduction for the cost of travel between her temporary accommodation and her temporary workplace but what she pays for accommodation is not a part of the cost of that travel and is not deductible.

This is an example of an itinerant employee who has no permanent home and makes her home wherever her work happens to take her. She cannot deduct the cost of her accommodation because she incurs no additional expense. This can be contrasted with the example below of an employee on secondment who has not retained accommodation for the duration of the secondment. Such employees are not itinerant and the expense of accommodation at the temporary workplace is attributable to the business travel.

[Im thus]

Move back in with your Mum/Dad/friend in Scotland. That will be your permanent residence.

The place you rent in London will be temporary.



EDIT: Didn't read properly, ignore my advice.

Kingcook this is what I was thinking, moving in with mate for cheaper rent and then work in London with a secondary residence.

Would it matter that the primary location is at a much lower rate because I'll only return few times in the period?

What happens if I decide to stay in London after, I understand at this point after I can't claim costs but what about the initial period where I have two residencies.

[LisaContractorUmbrella]

Kingcook this is what I was thinking, moving in with mate for cheaper rent and then work in London with a secondary residence.

Would it matter that the primary location is at a much lower rate because I'll only return few times in the period?

What happens if I decide to stay in London after, I understand at this point after I can't claim costs but what about the initial period where I have two residencies.

You would have to prove that you were paying out whilst staying with your friend in order to be able to claim the costs of the property in London as an expense. An expense has to be an additional cost that you have incurred because of your business - if you only paid your mate when you stayed with him and only paid rent when you were in London there would really be no additional cost. Depending on how much you were to pay your mate for renting one of his rooms there could also be tax implications for him.

[northernladuk]

One thing always to remember with expenses.... You only get 20% discount. The rest all comes out of your pocket in the end. Just because the company pays it doesn't make it free. Think about it for a bit.