The 24 Month Rule in a nutshell

[Calumdw]

Apologies as i am probably going to ask the same question as many others but i cant find the response that answers one part of my query.

I appreciate the 24 month rule and given i work in Scotland but have acquired a 6 month contract in London it looks as though i would be eligible to claim my accommodation as i am only going down for the purpose of this contract and i also have my own house in Scotland which i will not be renting out. The one part that is catching me out is that as i am a company director of my limited company and based on HMRC 480 document on expenses and benefits chapter 21 (21.3), would suggest that i cannot claim my rent, can anyone clarify this position?

https://www.gov.uk/government/upload...5/480-2014.pdf

Thanks,
Calum

[malvolio]

Nothing to do with 24 months. You fail the "wholly and exclusively" rule, since HMRC will assume you can use the rented accommodation at weekends.

[ChimpMaster]

Nothing to do with 24 months. You fail the "wholly and exclusively" rule, since HMRC will assume you can use the rented accommodation at weekends.

So he can get try to negotiate with a hotel and hire out a room Mon-Fri for those 6 months (obviously don't pay in advance!).

Or take out a 6 month assured tenancy agreement, explicitly written in the contract that you are not to stay at that accommodation on weekends unless it is for business purposes.

[cojak]

So he can get try to negotiate with a hotel and hire out a room Mon-Fri for those 6 months (obviously don't pay in advance!).

Or take out a 6 month assured tenancy agreement, explicitly written in the contract that you are not to stay at that accommodation on weekends unless it is for business purposes.

Or use sparerooms.com and set it out explicitly in the Lodging contract (mine did).

[Brussels Slumdog]

Nothing to do with 24 months. You fail the "wholly and exclusively" rule, since HMRC will assume you can use the rented accommodation at weekends.

I claim hotel accommodation Monday to Friday and occasionally stay the weekend. I always book out and book in seperately .Does this mean that I could fail the "wholly and exclusively" rule

[malvolio]

I claim hotel accommodation Monday to Friday and occasionally stay the weekend. I always book out and book in seperately .Does this mean that I could fail the "wholly and exclusively" rule

I don't believe so. You are showing clear separation of business and personal expenditure (and I assume you don't claim the latter... ). Easy enough with a hotel, not so easy with a lease/rental but it can be done. However the risk is still that Hector will deem it an artificial arrangement; they are good at that.

[kingcook]

Worth a read...

Tax Tribunal Considers Actor's Accommodation Expenses | HMRC DisputesHMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, London

[malvolio]

Worth a read...

Tax Tribunal Considers Actor's Accommodation Expenses | HMRC DisputesHMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, London

But only relevant if you have a seven day a week contract and only stay in the flat on working nights...

[Contreras]

Worth a read...

Tax Tribunal Considers Actor's Accommodation Expenses | HMRC DisputesHMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, London

I agree it's of interest to us contractors, albeit Tim Healy (an actor) appears to be self-employed.

Summary:

• The first tribunal held that leasing a flat should be treated the same as hotel expenses, i.e. deductible.
• HMRC appealed this common sense view. HMRC says there was 'duality of purpose'.
• The second tribunal agreed with HMRC, that's not what the law says.
• The Judges however made clear that 'duality of purpose' is not automatic.
• The Judges threw it back at the first tribunal, to consider this test properly.
• The only winners, so far, are the lawyers.

... we have found nothing that indicates that expenditure under a tenancy agreement that lasts for a period of nine months cannot be deductible. As we have indicated, each case must be looked at on its own facts and we see no reason, as suggested by [HMRC], why expenditure on rental accommodation is, except in special cases, in a different position to hotel or club accommodation.

... We regard accommodation which was only taken in response to an offer of a specific engagement far from home rather than for any other reason as being of a different character; it does not have to be the case that Mr Healy, whether consciously or not, had the purpose of satisfying his need for warmth and shelter in taking on the flat.

... Mr Healy as an actor may be offered a series of short term assignments away from his home in respect of which he may claim deductible hotel or other accommodation expenses, or he may obtain a longer assignment, such as that in Billy Elliot and decide to take a tenancy of a flat. If he in his own mind viewed those different circumstances on entirely the same basis, namely that the sole purpose of the accommodation was a business purpose, then in our view there is no reason why in principle he should not be able to deduct the expenditure in both cases. There is no hard and fast rule as to when the length of the assignment clearly tips the balance in favour of a conclusion that there is a dual purpose; it will be a matter of fact and degree in the particular circumstances.

Linky: http://www.tribunals.gov.uk/financea...-tim-healy.pdf

[BoredBloke]

I agree it's of interest to us contractors, albeit Tim Healy (an actor) appears to be self-employed.

Summary:

• The first tribunal held that leasing a flat should be treated the same as hotel expenses, i.e. deductible.
• HMRC appealed this common sense view. HMRC says there was 'duality of purpose'.
• The second tribunal agreed with HMRC, that's not what the law says.
• The Judges however made clear that 'duality of purpose' is not automatic.
• The Judges threw it back at the first tribunal, to consider this test properly.
• The only winners, so far, are the lawyers.

Linky: http://www.tribunals.gov.uk/financea...-tim-healy.pdf

This really is a crock and hardly joined up thinking. I'm renting a flat at the moment for the contract I'm doing. I do it for a number of reasons. 1 - it allows me to have some of my stuff in one place, so I'm not lugging clothes and the like to the other end of the country. 2 - it gives me the flexibility if I'm needed at weekends without being stung for the cost of a hotel if I have to book at short notice. 3 - its way cheaper than hotels. As for it being available at weekends, yes it is, but I have a much bigger house where me and my family live. I work away from home enough throughout the week, I'm hardly going to jump at the chance of spending a weekend in a pokey little flat.

I thought MP's also had to pass the wholly and exclusively test for their expenses. Hardly seems fair that their role means they can rent accommodation but my company has to pay over the odds because it is only allowed to expense hotels.