Renting flat while working away from home

[TheCyclingProgrammer]

In my view, the legislation doesn’t cover rent costs/hotel costs where accommodation is rented near the project of work because your home is too far away to commute and you will therefore be involved in incurring an incremental cost. Accommodation and receipted evening meals can continue to be claimed via your company as a tax allowable expense. Always best to get the rental agreement in your company's name.

I'm confused - you appear to be both saying it isn't allowable and is allowable.

OP isn't commuting, they are staying near their client's co on business.

[Forbes Young]

I have a 2 year contract 100 miles away from our family home. I don't fancy living in a hotel for 5 days a week and would rather rent a flat.

Do I claim the rent as a personal expense from my Ltd? I won't be able to pass it onto client but their day rate is good enough to cover it. If I claim as an expense is it a tax deductible expense?

Alternatively, can the Ltd co rent the property for me and again treat it as an expense before tax?

With thanks

The temporary workplace rule is specifically for travel to a main work location. The whole basis of this legislation is to give workers some relief when working at a temporary workplace. Beyond 24 months, this workplace is no longer temporary but classed as permanent, unless less than 40% of the time is spent on that specific workplace. In my view, the legislation doesn’t cover rent costs/hotel costs where accommodation is rented near the project of work because your home is too far away to commute and you will therefore be involved in incurring an incremental cost. Accommodation and receipted evening meals can continue to be claimed via your company as a tax allowable expense. Always best to get the rental agreement in your company's name.

[BolshieBastard]

If there as an intention for the contract to last longer than 24 months in the first place, then I'd agree but as the proposed contract is for 24 months anyway, then I don't think its unreasonable.

HMRC can argue all they like of course but I'd imagine the onus on them would be to prove that there was an expectation of the contract to last longer than 24 months if you have a signed contract stating less. That wouldn't be hard of course if you were pulling a fast one (a quick email to ClientCo would probably drop you in it).

On the other hand, a 24 month contract is largely meaningless given you can be binned at any time more or less so you could equally argue why sign such a long contract - why not 6 months or 12 months?

Yes I can appreciate and understand that. Im not trying to be argumentative, Im just now ultra cautious as Im caught up in BN66 and seen the tactics hmrc can and do use.

Im just putting it out there that despite current legislation, hmrc are quite successfully blurring the lines between evasion which we all know is illegal and, avoidance which while totally legal, hmrc are trying to stamp out.

Similarly, I would not touch Government contracts now because of their 'off payroll' FUD. Despite people having their contracts amended to be inside, I would not doubt in future years, Government \ hmrc will see this as evasion \ avoidance with commensurate results.

This is just my opinion \ ultra cautious approach though!

[TheCyclingProgrammer]

Given hmrc's stated aim of tackling avoidance and, trying to blur the lines with evasion, Id suggest wording a contract to be one, two or three days etc less than the 24 month rule would be playing into their hands.

Of course some may see that as ultra cautious and claim the 'regs state that.....' etc. Each to their own. I'd suggest people do not have contracts worded to be very close to or on the boundary for such things.

If there as an intention for the contract to last longer than 24 months in the first place, then I'd agree but as the proposed contract is for 24 months anyway, then I don't think its unreasonable.

HMRC can argue all they like of course but I'd imagine the onus on them would be to prove that there was an expectation of the contract to last longer than 24 months if you have a signed contract stating less. That wouldn't be hard of course if you were pulling a fast one (a quick email to ClientCo would probably drop you in it).

On the other hand, a 24 month contract is largely meaningless given you can be binned at any time more or less so you could equally argue why sign such a long contract - why not 6 months or 12 months?

[BolshieBastard]

The legislation explicitly says "more than 24 months" which to me means exactly 24 months is fine, but making it one day less to err on the side of caution and avoid any possible arguments seems reasonable to me.

Income Tax (Earnings and Pensions) Act 2003

Given hmrc's stated aim of tackling avoidance and, trying to blur the lines with evasion, Id suggest wording a contract to be one, two or three days etc less than the 24 month rule would be playing into their hands.

Of course some may see that as ultra cautious and claim the 'regs state that.....' etc. Each to their own. I'd suggest people do not have contracts worded to be very close to or on the boundary for such things.

[handyandy]

Whether you go for personal expense charged back to your or your pays directly it will work out the same. When I did it I did personal expense as you will tend to find it difficult to get a landlord/estate agent to accept yourco as the legal tenant (they run a reference check on you which includes ccj's etc.).

[TheCyclingProgrammer]

I believe a day less is fine, 24 months is no, it's not a temporary workplace, so no expenses....

The legislation explicitly says "more than 24 months" which to me means exactly 24 months is fine, but making it one day less to err on the side of caution and avoid any possible arguments seems reasonable to me.

Income Tax (Earnings and Pensions) Act 2003

[TheCyclingProgrammer]

Do you expect the contract to last longer than 24 months? If not, then I would ensure your contract is dated such that expires before 24 months (even if it's just one day) so you aren't caught by the 24 month rule.

You should then be able to rent a place tax free - either paid by YourCo or paid personally and reimbursed - it makes no difference (needs to go on the P11D either way). But make sure you fully understand the rules regarding travel, subsistence and accommodation when working at a temporary workplace.

Also bear in mind that the moment you know the contract will last more than 24 months, i.e. an extension, you will need to stop claiming.

[SueEllen]

24 Month Rule :: Contractor UK

Dangerous ground. Anyone know what the rule is for exactly24 months.

That's why I said talk to your accountant.

This is a link for a well known accountancy firm linky

[TykeMerc]

24 Month Rule :: Contractor UK

Dangerous ground. Anyone know what the rule is for exactly24 months.

I believe a day less is fine, 24 months is no, it's not a temporary workplace, so no expenses....

[Pondlife]

I have a 2 year contract

24 Month Rule :: Contractor UK

Dangerous ground. Anyone know what the rule is for exactly24 months.

[SueEllen]

The best thing to do is talk to your accountant.

[TheMrs]

I have a 2 year contract 100 miles away from our family home. I don't fancy living in a hotel for 5 days a week and would rather rent a flat.

Do I claim the rent as a personal expense from my Ltd? I won't be able to pass it onto client but their day rate is good enough to cover it. If I claim as an expense is it a tax deductible expense?

Alternatively, can the Ltd co rent the property for me and again treat it as an expense before tax?

With thanks