Reply to: Accommodation Rental

[LisaContractorUmbrella]

I was hoping to avoid all kinds of accountants and do everything myself but it just looks like a total minefield.

There is a lot to think about if you are new to contracting but a decent umbrella company or accountant will be able to explain things to you; once you have a grasp of it all you will be in a position to take on more yourself

Good luck

[dav]

I was hoping to avoid all kinds of accountants and do everything myself but it just looks like a total minefield.

[LisaContractorUmbrella]

NorthernLad is right, it is more complicated than that - it will depend on the circumstances under which you are working in the UK, how long the contract is, whether you have rented out your property at home etc etc. Your umbrella company should be asking for quite detailed information before advising that the expense is allowable.

[eek]

Hello,

I was told by my umbrella company that I can claim for accommodation as long as I am maintaining a property elsewhere.

Now in my case, I am new in the UK and this is my first contract and I own a property back in my home country which I purchased with the help of a bank loan. I will continue to pay my monthly instalments to the bank and also the property is in my name and so are the utility bills.

My umbrella company is telling me that I can claim for my rental accommodation here in the UK as long as I can prove that I am maintaining (own or rent) a property in my home country, such as a sale deed or utility bills which are in my name in this case.

Now my question is, is this really the case ? Has anybody done this before ?

Your advice in this regard is much appreciated.

Regards,
OR.

The test the inland revenue will use is a simple one:-

Do you use the rental property outside the working week. If the answer to that question is Yes they will argue over the expense claim.

[northernladuk]

Hello,

I was told by my umbrella company that I can claim for accommodation as long as I am maintaining a property elsewhere.

Now in my case, I am new in the UK and this is my first contract and I own a property back in my home country which I purchased with the help of a bank loan. I will continue to pay my monthly instalments to the bank and also the property is in my name and so are the utility bills.

My umbrella company is telling me that I can claim for my rental accommodation here in the UK as long as I can prove that I am maintaining (own or rent) a property in my home country, such as a sale deed or utility bills which are in my name in this case.

Now my question is, is this really the case ? Has anybody done this before ?

Your advice in this regard is much appreciated.

Regards,
OR.

I don't think it is as black and white as that. It depends on your situation over here. Are you here for a long stint so it can be argued the place here is now your home from home because you are going to be here for a long stint or are you renting for a 6 month contract.

One is obviously taking the piss, just because you have a home else where doesn't mean this is your temp one, the other is a valid expense.

[SueEllen]

Hello,

I was told by my umbrella company that I can claim for accommodation as long as I am maintaining a property elsewhere.

Now in my case, I am new in the UK and this is my first contract and I own a property back in my home country which I purchased with the help of a bank loan. I will continue to pay my monthly instalments to the bank and also the property is in my name and so are the utility bills.

My umbrella company is telling me that I can claim for my rental accommodation here in the UK as long as I can prove that I am maintaining (own or rent) a property in my home country, such as a sale deed or utility bills which are in my name in this case.

Now my question is, is this really the case ? Has anybody done this before ?

Your advice in this regard is much appreciated.

Regards,
OR.

As your English is fluent the best source to confirm the umbrella company's understanding is actually the HMRC site.

For starters have a look at this:
http://www.hmrc.gov.uk/guidance/480.pdf

Then search via google for any other documents it points you to as unfortunately the UK tax system is really complicated and it relies on finding the relevant documents, reading them and asking questions.

[Scrag Meister]

When I first moved up to London I rented a room in a house share and paid the entire rent each month from my company, my main home was in Devon, the landlord provided a receipt each month which went to my accountants.

This however only lasted for the first 2 years of my first contract, due to the 2 year expenses rule.

[bystander]

Can primary property be in another country ?

Hello,

I was told by my umbrella company that I can claim for accommodation as long as I am maintaining a property elsewhere.

Now in my case, I am new in the UK and this is my first contract and I own a property back in my home country which I purchased with the help of a bank loan. I will continue to pay my monthly instalments to the bank and also the property is in my name and so are the utility bills.

My umbrella company is telling me that I can claim for my rental accommodation here in the UK as long as I can prove that I am maintaining (own or rent) a property in my home country, such as a sale deed or utility bills which are in my name in this case.

Now my question is, is this really the case ? Has anybody done this before ?

Your advice in this regard is much appreciated.

Regards,
OR.

[pmeswani]

Is someone able to tell me whether my take home profit would be less or more for each circumstance above? i.e take home pay by taking the flat and take home pay by taking the house share?

I think you can work that out for yourself. Here is a simple formula for legitimate business expenses factored in.


(Monthly Business Income - Legitimate Business Expense) *.80 will give you Take Home Pay + Legitimate Business Expense.

If your expense is not legitimate, then the following formular will apply.

Monthly Business Income * 0.80 = Monthly Take Home Pay.

(Monthly Take Home Pay = Salary + Dividends).

If you work it out for yourself, you will find that if your rent is a legitimate expense, then your take home pay will be higher.

But as we don't know if you are inside or outside IR35, we cannot be certain if you are better off. If you are inside IR35, you may not be entitled to claim the full amount for rent. If you are outside IR35, you should be ok, as long as you are able to take the right amount for Salary and the right amount for Dividends.

We won't work out how to do the maths for you, but I am sure with the information provided above, you will be able to work it out yourself.

[suri77]

Simple question, looking for a smple answer...Have asked my accountant to explain several times but he has been very vague, which is worrying!

I have a contract which is vat registered and I want to find out how claiming the expenses work through a ltd company.

eg if I was to rent a flat for £600 a month, how is this broken down in my end of year accounts? I am pretty sure I do not get the full £600 back and that it is used as a tax break somehow. But my accountant has yet to explain how this works.

The other alternative is to house share (not my preference, but if it saves money then I will) this would cost around £350 a month.

Which is the money saving option? would there be much difference in my end of year accounts?

My contract earns around £40k per annum.

Is someone able to tell me whether my take home profit would be less or more for each circumstance above? i.e take home pay by taking the flat and take home pay by taking the house share?

[SueEllen]

I was thinking of the single person allowance of 25% assuming you;ve a partner living in the normal place of residence. If you're not there for most of the week is it not fair to claim it?

You won't be able to claim it.

As your main address* is where you partner is.

If you claim that the main address is the rental property then you can't claim the rent, council tax or other bills as business expenses.

*main address = main residence

[SueEllen]

Can you claim a reduction on CT on your first main place if you're only there say weekends?

If CT means council tax then no you can't.

As you have to pay full council tax on your main residence.

[stek]

Only for use of home, and if you're already claiming for a second business location then I think it would be difficult to argue it with HMRC.

The HMRC use of home guide rate is £3 a week - if you're in London (for example) for 5 days and claiming that rent then in theory the most you're doing from your home address is 2 days out of 7. Claiming for those 2 days as well would mean arguing to HMRC that you're a workaholic - not out of the questions obviously, but maybe not worth the argument for the sake of such a potentially small extra claim.

I was thinking of the single person allowance of 25% assuming you;ve a partner living in the normal place of residence. If you're not there for most of the week is it not fair to claim it?

[Clare@InTouch]

Can you claim a reduction on CT on your first main place if you're only there say weekends?

Only for use of home, and if you're already claiming for a second business location then I think it would be difficult to argue it with HMRC.

The HMRC use of home guide rate is £3 a week - if you're in London (for example) for 5 days and claiming that rent then in theory the most you're doing from your home address is 2 days out of 7. Claiming for those 2 days as well would mean arguing to HMRC that you're a workaholic - not out of the questions obviously, but maybe not worth the argument for the sake of such a potentially small extra claim.

[stek]

Can you claim a reduction on CT on your first main place if you're only there say weekends?