Reply to: Accommodation whilst working

[SueEllen]

Or, they wish to keep it cash in hand / off the books, which I believe is quite common in the room rental game.

You get a tax free allowance of £7500 a year anyway.

[LondonManc]

More and more are parked on the M6 on a Friday.

FTFY

I'd love an hour commute each day instead of staying away. I guess it's personal circumstances though.

If you don't mind putting a lot of miles on your car, driving is a great way to get a lot of money out of your company in a very tax effective way; it's straight off the top line rather than having to subject it to corporation tax and dividend tax and doesn't impact on your takehome pay.

[MrMarkyMark]

If the person goes cool they are probably sub-letting without the agreement of their landlord.

Or, they wish to keep it cash in hand / off the books, which I believe is quite common in the room rental game.

[SueEllen]

Am I looking for a rental agreement here or receipts?

I've been to see a few places and when I mention either, the home owner or the person renting the room seems to go a bit cool. I guess they can get someone else in without them needing to make people aware of what they are doing.

If I did take a rental, could I then claim the travel between the rental accommodation and the place of work?

If the person goes cool they are probably sub-letting without the agreement of their landlord.

[Ted]

There are plenty of example rental agreements if you search online. Amend one as appropriate and get the landlord to sign it, if hey dont already have one themselves. If you make it clear that you are only renting Mon-Fri then you shouldn't get caught out by HMRC only allowing claims for 5/7ths of the rate on the basis that it is available for personal use on weekends.

Am I looking for a rental agreement here or receipts?

I've been to see a few places and when I mention either, the home owner or the person renting the room seems to go a bit cool. I guess they can get someone else in without them needing to make people aware of what they are doing.

If I did take a rental, could I then claim the travel between the rental accommodation and the place of work?

[SueEllen]

More and more are WFH on a Friday.

Roads are definitely NOT clear on a Friday PM.

[yMyjgT]

Currently commuting 1:45 to 2:00 each way.
Will be getting a room, to use on Tuesdays and Thursday nights, making Monday the only day I go there and back.

I find a room is cheaper than hotels, AND you get to leave all your gear there, clothes, food, AND the flexibility of turning up as and when you want.
Factor in cheaper meals when renting a room. You'll be spending more eating out in hotels, making a room cheaper.

[Lance]

More and more are WFH on a Friday.

I can count the number of times I've been in an office, on a Friday, in the last 5 years, on one hand.

[BrilloPad]

Friday's are better for traffic? Perhaps at 4am ...

More and more are WFH on a Friday.

[BackupBoy]

Friday's are better for traffic? Perhaps at 4am ...

[Lance]

The commute is killing me and my car - as well as adding 10+ hours onto my working week

Before getting a flat try hotels. You may well find that mixing the week up is better than all or nothing.
Commute on a Sunday night, stay 3 nights in a hotel, and commute on Thu/Fri. Fridays are usually better for traffic anyway.
This is far more flexible and you can cancel at short notice.
If you find that 5 days a week is really what you want then you can commit to something longer term.

[DaveB]

EDIT: If I get a room through a site like spareroom.co.uk etc. it is highly unlikely that the provider will be in a position to offer receipts - as they are just people letting out rooms in their houses. Does this have an adverse effect on putting it through expenses or how is this handled?


Thanks.

There are plenty of example rental agreements if you search online. Amend one as appropriate and get the landlord to sign it, if hey dont already have one themselves. If you make it clear that you are only renting Mon-Fri then you shouldn't get caught out by HMRC only allowing claims for 5/7ths of the rate on the basis that it is available for personal use on weekends.

[kevpuk]

2 out of my last 3 gigs have been approx. 90 miles from home, and I elected to stay close to Client. I found a decent room via Spareroom for the earlier of the two gigs, which was within 2min walk to that Client office.....and then, when I took current gig on, I went back to same room, albeit now with a 25min drive each way to ClientCo.

As has been said, fine to have YourCo pay for accomm., subject to certain criteria including 24-month rule.......and, as has also been said, it is still kinda your money, albeit with 'discount' in terms of Corp Tax and so on.

[Contreras]

Thanks - I'll definitely be speaking to my accountant. I'm only been contracting for a few months now so I just want to understand things before I go and get bombarded with accountacy lingo.

I suppose at a stretch, I could get a receipt book for the landlord and get them to fill it in for me. Hopefully that would suffice.

I presume my company would be able to 'save' 20% of the rent when tax is due to be paid?

Your accountant will explain this to you. The expense (if wholly and necessary for business) reduces YourCo's profit, before tax, so there's less profit, ergo less tax.

Doesn't matter if you pay out-of-pocket and reclaim from YourCo, or using the company debit card, or via bank transfer, the end effect is the same. Just make sure you keep accurate records.

Fwiw, I prefer to pay direct from the company wherever possible, mostly cos I find that makes for simpler for bookkeeping. Also fwiw, while starting out I found it useful to keep a handwritten "primary record" - date, description and amount scribbled in the back of a notebook - as a fallback and to save me forgetting to enter stuff electronically.

[Fred Bloggs]

No problem Ted, it's not often that OP's answer their own questions.

Have a look at airbnb or sparerooms - I've used sparerooms and I have friends who use airbnb for this kind of Mon-Fri accommodation.

+1 Air BnB, I have used it four times and one was a bit of a hovel but the other three were great. Iromically the one at GBP 24 a night was by far the best and cheapest.