Writing off accomodation expenses

[Shieldsy]

I am in this situation now as a contractor and faced a similar situation as an employee seconded to a long term project in London where the company provided accomodation etc.

Rent is an acceptable expense however only for up to two years. As soon as you are aware that the contract will run for over two years then it is not - your new location will become your 'permanent place of employment' and expenses incured will not be tax deductable. It is important to remember that it is the point that you become aware that the contract is for more than two years. i.e. if you were given a 25 month contract then you could not claim rent as an expense.

Also is important to demonstrate that your permanent residence is your home in London. The tax man will expect you to return there regularly i.e. most weekends.

With regards to bills I claim Water 100% as this is not metered therefore have to pay full amount regardless of how much I use. For gas and electricity which are metered then I only claim the standing charge as the cost of the actual fuel would have to be paid anyway at my home.

Council tax is a claimable expense.

I am not qualified however the above is advice from my accountant and my previous employers tax expert.

Hope this helps.

[scooterscot]

If it ever comes head to head with the tax man this is your agreement: I rented instead of paying for a hotel because it was cheaper and I would have more profits left to pay more tax to you kind sir. They cannot argue with that!! GRRRRR love your tax man

[Bluebird]

I suppose depending on the distance between your Co location and the client site - could you not claim milage instead or rent.

[PAH]

I've rented instead of staying in hotels/b&bs whenever possible, usually governed by whether I think the contract will last beyond the 6 month minimum rental period.

Had no problems whatsoever claiming the cost of the accommodation, gas/leccy bills, council tax etc as expenses, providing I can prove my main residence is outside reasonable commuting distance.

As has been mentioned you can claim milage allowance to get to/from your main/temporary residence, which I do for each weekend as I always go back to my permanent residence every weekend, honest.

[xoggoth]

If you check IR booklets, 380 I think, you will find that the IR themselves say a flat is ok if it is no more than an alternative to a hotel.

[cykophysh39]

I am working in Dublin, and just recently queried the deduction with my Accountants (SJD) , and the response was that

You can put the cost of the room in ........ under Accommodation. If the only reason you hire the room, is to enable you to do your consulting work for ........... in ........... , you can claim the full cost of the
room.

[ASB]

Bluebird
I agree with you and I argued the same point. However, there are 2/3 contractors here who asked their respecive accountants and all said that hotel is fine but not the rented accomodation.

Personally I've had rented accomodation and charged absolutely everything. Survived investigation with no problems. However:-

- You do need an alternative residence which you would normally be using
- Allocate some of the cost for private use. I took 10% of the total claimed as a BIK.

[boredsenseless]

Bluebird
I agree with you and I argued the same point. However, there are 2/3 contractors here who asked their respecive accountants and all said that hotel is fine but not the rented accomodation.

Thats my view as well thats why I use hotels even though they are a little more expensive

[PAG]

Bluebird
I agree with you and I argued the same point. However, there are 2/3 contractors here who asked their respecive accountants and all said that hotel is fine but not the rented accomodation.

[Bluebird]

I thought rented accomodation can not be claimed as an expense. even if it is for business purpose.

why not ?

It's a legitimate business expense isn't it ?

The way to look at is as follows:

1. Your Corp Tax is based on what profit you make
2. Your profit is the difference between what you get paid for anf what you pay out
3.What you pay out are Business Expenses - i.e. Salary, IT, Travel and accommodation if that is whats required in order for you to get revenue.

Simple eh ?

[PAG]

I thought rented accomodation can not be claimed as an expense. even if it is for business purpose.

[mictech]

As long as you rent the flat solely for business purposes then it is 100% claimable. If you use it for personal use then you should pay tax as a percentage of use as a BIK.

So if your playing away from home and using the flat you should inform the taxman the BIK, but make sure make sure the missus doesn't see you SA return.

[Gordon Gecko]

Most helpful! Thanks squire!

[The Lone Gunman]

I am based in London but have been offered a contract in Scotland. For the duration of the contract, London would remain as my primary residence, if I rent a place in Edinburgh, can I use this as a valid business expense?

Any help greatly appreciated. The Inland Revenue website isn't overly helpful. Thanks!

Look up the 2 year rule on this site.

Conditions: As soon as you know you will be on site for 2 years you can not claim travel or accom.

As long as you rent the flat solely for business purposes then it is 100% claimable. If you use it for personal use then you should pay tax as a percentage of use as a BIK. You can also claim travel. Either cost of train/plane fare or 40p per mile should you drive your own car.

As ever: I am not qualified to give this advice.

[Gordon Gecko]

I am based in London but have been offered a contract in Scotland. For the duration of the contract, London would remain as my primary residence, if I rent a place in Edinburgh, can I use this as a valid business expense?

Any help greatly appreciated. The Inland Revenue website isn't overly helpful. Thanks!