Reply to: Limited company - rent as an expense

[Lance]

A friend is a doctor who normally lives in Wales, he has now moved to Essex (exclusively for work purposes) to locum at a hospital and now rents a private property whilst still paying a mortgage on his property in Wales. He has formed a limited company and the query is will he be able to claim rent as an expense? (the assumption is he is working outside IR35)

Given that doctors have been providing locum services since before there was an NHS aren't there some more appropriate forums to ask this question?

Like the BMA for example.

Or do you think the answer from a bunch of mostly IT contractors will provide the answer you want? (and none of whom are lawyers or accountants(well there are a few accountants lurking here)).

[simes]

Okay, so he rarely goes back to Wales due to a very unpredictable schedule (working many weekends), is there not a justification for pro-rataing the rent expense, so he works on average 4 days per week, can he not expense 4/7 of the total rent to the business?

Thanks

As above, if you're not looking to get investigated, then expense the lot and take it on the chin if ever there is an investigation.

But, just ensure he is Investigation insured.

Not sure there is much else to say here.

[rutar]

Hi

There shouldn't be a problem assuming he still maintains his primary residence in Wales. There could be implications if he stays there on weekends/days off this is not wholly and exclusively business related.

1. Ensure the tenancy agreement is in the companies name and paid from the company bank account.
2. Ensure the tenancy agreeement is short term (most assured shorthold tenancies are - hence their name).
3. Tell him to appoint an accountant to advise on these queries.

Regards

Dom

Okay, so he rarely goes back to Wales due to a very unpredictable schedule (working many weekends), is there not a justification for pro-rataing the rent expense, so he works on average 4 days per week, can he not expense 4/7 of the total rent to the business?

Thanks

[mudskipper]

Is he aware of the proposed change from April '17, where the engager will determine IR35 status, and deduct taxes at source?

[northernladuk]

More than me. I'm still stuck on £8.5k.

TBH I'm glad to hear that the people who actually add real value to society and save the lives of our loved ones earn more than us.

[blackeye]

Around 11k a year. HTH

More than me. I'm still stuck on £8.5k.

TBH I'm glad to hear that the people who actually add real value to society and save the lives of our loved ones earn more than us.

[Dominic at Fox-Bartfield]

Hi,

A friend is a doctor who normally lives in Wales, he has now moved to Essex (exclusively for work purposes) to locum at a hospital and now rents a private property whilst still paying a mortgage on his property in Wales. He has formed a limited company and the query is will he be able to claim rent as an expense? (the assumption is he is working outside IR35)

Thank you

Hi

There shouldn't be a problem assuming he still maintains his primary residence in Wales. There could be implications if he stays there on weekends/days off this is not wholly and exclusively business related.

1. Ensure the tenancy agreement is in the companies name and paid from the company bank account.
2. Ensure the tenancy agreeement is short term (most assured shorthold tenancies are - hence their name).
3. Tell him to appoint an accountant to advise on these queries.

Regards

Dom

[northernladuk]

How much to locum doctors earn? Just out of curiosity...

Around 11k a year. HTH

[blackeye]

How much to locum doctors earn? Just out of curiosity...

[eek]

So it's his primary residence now? Or does he travel back to Wales for the weekend. Every weekend.

If he's using it at the weekends it's his primary residence and so not a valid business expense IMHO.

Edit: As for the "it'll never happen to me" approach to IR35 I assume he has insurance to cover the legal costs of an investigation regardless of the result?

I hope he doesn't... I would really dislike to see my insurance premium wasted on blatant IR35 abuse cases like this one...

[Pondlife]

Hi,

A friend is a doctor who normally lives in Wales, he has now moved to Essex (exclusively for work purposes) to locum at a hospital and now rents a private property whilst still paying a mortgage on his property in Wales. He has formed a limited company and the query is will he be able to claim rent as an expense? (the assumption is he is working outside IR35)

Thank you

So it's his primary residence now? Or does he travel back to Wales for the weekend. Every weekend.

If he's using it at the weekends it's his primary residence and so not a valid business expense IMHO.

Edit: As for the "it'll never happen to me" approach to IR35 I assume he has insurance to cover the legal costs of an investigation regardless of the result?

[Hobosapien]

And if you are playing that game why are you even bothered what the answer to your question is. Just stick it all through the company. You'll never get found out. :

So true. You can claim for anything if not bothered about the risk of being caught.

I know it is (or was) legitimately possible to claim rent (and associated costs such as council tax/leccy/water) for a temp property near client instead of hotel/b&b but I last did it before the more recent T&S/IR35 changes so would be a lot more wary these days.

[northernladuk]

Apologies, I guess I havent been clear. When I say he's assuming he's outside IR35, he (we) know that most probably he's inside, but operating on the assumption tha he wont be investigated. We know IR35 is a huge issue but hardly no of anyone to have been investigated and made to cough up the correct tax

Bearing in mind you've no idea of how many people have been investigated and how much they have to pay up then that's a really bad line to take. In two or three years time if he does get caught he's gonna lose is home and and everything. Please feel free to update us when it hits.

And if you are playing that game why are you even bothered what the answer to your question is. Just stick it all through the company. You'll never get found out. :

[LondonManc]

Apologies, I guess I havent been clear. When I say he's assuming he's outside IR35, he (we) know that most probably he's inside, but operating on the assumption tha he wont be investigated. We know IR35 is a huge issue but hardly no of anyone to have been investigated and made to cough up the correct tax

Advertising on a public forum that a Wales-based doctor doing locum work, probably inside IR35, on three sites in Essex isn't exactly playing Dr Inconspicuous though, is it?

[rutar]

Apologies, I guess I havent been clear. When I say he's assuming he's outside IR35, he (we) know that most probably he's inside, but operating on the assumption tha he wont be investigated. We know IR35 is a huge issue but hardly no of anyone to have been investigated and made to cough up the correct tax