Reply to: Renting a flat - what about bills and council tax?

[Lance]

So that's it? You basically get a slap on the wrist and pay it back?
I assume that's on a expense by expense basis as well.

Correct. Unless of course they thought that it was something other than a genuine mistake. At that point it's evasion/fraud.
From people I know who've been investigated it's the little signs that start them digging. Even if it's a genuine mistake as there are liekly to be many, many more 'genuine' mistakes.

But like the Isle of Man "retain 90% of your money" schemes, it's about your own risk appetite.

Have you asked your accountant what he says?

For the record.... your stay overnight when your car broke down is classed as business travel.... so no problemo...

[johndc31]

The expense would be disallowed and would then be re-added to the tax calculations for both the ltd year end and individual's self assessment declared income or BIK.

Personally I've never been overly worried as it will only get picked up if HMRC investigate, and as long as you can show to some degree it's not prime residence and any weekend stopovers are rare/one-off then I wouldn't lose any sleep if some anal cretin at HMRC wants to apply the rules with zero tolerance.

I once had a car breakdown while on the way home on a Friday, so had to re-book into the hotel over the weekend. I claimed it on the expense (I was forced to stay away from home, regardless of the fact the AA relay could have towed me all the way home). I won't lose sleep of scary HMRC in those circumstances. The sums involved are relatively minute.

So that's it? You basically get a slap on the wrist and pay it back?
I assume that's on a expense by expense basis as well, I really can't see them having the resources to chase buttons especially if you've got insurance and can drag it out.

[johndc31]

I've done the odd weekend stay due to a number of reasons. Illness being one, when you can't drive.

[LondonManc]

The expense would be disallowed and would then be re-added to the tax calculations for both the ltd year end and individual's self assessment declared income or BIK.

Personally I've never been overly worried as it will only get picked up if HMRC investigate, and as long as you can show to some degree it's not prime residence and any weekend stopovers are rare/one-off then I wouldn't lose any sleep if some anal cretin at HMRC wants to apply the rules with zero tolerance.

I once had a car breakdown while on the way home on a Friday, so had to re-book into the hotel over the weekend. I claimed it on the expense (I was forced to stay away from home, regardless of the fact the AA relay could have towed me all the way home). I won't lose sleep of scary HMRC in those circumstances. The sums involved are relatively minute.

Correct. You can easily argue the odd weekend stayover at a flat rather than subjecting yourself to travel fatigue. Unless HMRC would rather you put your own health at risk - they'd soon back off if you start talking like that.

[Lance]

The sums involved are relatively minute.

For one night in a hotel yes.
For 12 months of a London rental?

[Hobosapien]

The expense would be disallowed and would then be re-added to the tax calculations for both the ltd year end and individual's self assessment declared income or BIK.

Personally I've never been overly worried as it will only get picked up if HMRC investigate, and as long as you can show to some degree it's not prime residence and any weekend stopovers are rare/one-off then I wouldn't lose any sleep if some anal cretin at HMRC wants to apply the rules with zero tolerance.

I once had a car breakdown while on the way home on a Friday, so had to re-book into the hotel over the weekend. I claimed it on the expense (I was forced to stay away from home, regardless of the fact the AA relay could have towed me all the way home). I won't lose sleep of scary HMRC in those circumstances. The sums involved are relatively minute.

[johndc31]

Especially if you've worked late Friday. I've occasionally travelled back early Saturday morning and often come down late on Sunday (that's more to pay £40 rather than £140 for a train ticket); I don't see either of those as a benefit in kind, more of a benefit of incurring a higher accommodation cost to offset the inconvenience of working away.

Same.
It's all subjective. I suppose if you ever get collared by hector you must have reasonable reasons why made such decisions.
Personally I really don't think HMRC have the time or resources, if you're obviously taking the p1ss then that's a different matter.

As a matter of question, what's the worse case scenario? you pay back the tax owed?

[LondonManc]

What 'BENEFIT in kind' is it if you chose not to go back home for one weekend if you lived far away? I have stayed over in hotels while travelling rather than come all the way back for the weekend. What is the benefit here?

Especially if you've worked late Friday. I've occasionally travelled back early Saturday morning and often come down late on Sunday (that's more to pay £40 rather than £140 for a train ticket); I don't see either of those as a benefit in kind, more of a benefit of incurring a higher accommodation cost to offset the inconvenience of working away.

[Lance]

What 'BENEFIT in kind' is it if you chose not to go back home for one weekend if you lived far away? I have stayed over in hotels while travelling rather than come all the way back for the weekend. What is the benefit here?

If you stay on in a hotel for another day it's a BIK. You may not know this or have declared it but it is.

[Lance]

Although it doesn't speak to utility bills, we strongly suggest you read this Actor loses battle for tax relief for accommodation costs

On a practical note if you can bear a flatshare then https://www.mondaytofriday.com may be of interest.

This is why managed apartments are expensive. The Monday-Friday model is almost all for business people on expenses who are sick of hotels. Monday to Friday lets avoid the issue with BIK (mostly anyway). It's a good business model and I owned property in London I'd rent it out Mon-Fri rather than to scrotes who I can't turf out when I want.

[AnthonyQuinn]

Go for it then but remember the moment u use it at weekend it's a BIK, though TBH I doubt HMRC would ever find out......

What 'BENEFIT in kind' is it if you chose not to go back home for one weekend if you lived far away? I have stayed over in hotels while travelling rather than come all the way back for the weekend. What is the benefit here?

[johndc31]

I'd also like to add that I've worked in property and residential leasing and I can tell you chasing payment for 3 months rent when the lodger has terminated due to job loss isn't worth chasing.

If you don't pay they will have to pursue court proceedings, which is a long drawn out process. Worst case scenario is a day before the court hearing you just pay the rent owed but I doubt it would get to that stage.

They will just move on and try and rent the property if they've got a brain.

Also you might was to consider Gumtree and NOT go through a agent. Try and get a gentleman's handshake in place.

[johndc31]

The Healy case is much different

1. He had no subsistence receipts. Duh!!
2. He rented a 2-3 bedroom place. Who does that? Unless you're wanting to entertain guests?

I've been in a similar situation. I ended up doing the following.

1. 1 bedroom roomshare and get the landlord to make a receipt in the company name. Ideally get a tenancy document written out in the company name with the days the company is paying for ie. 4 nights Mon-Fri
2. Claim subsistence on anything which is related to the contract that is outside your normal working patterns. Ie. Lunch (the odd evening meal here or there where you couldn't get home to eat or it was too late). Don't take the p1ss.
3. Do not claim anything that's via a supermarket receipt. Just don't do it, unless it's a meal deal whilst you're in work. Super market receipts get unwanted attention, naturally.
4. Go home at weekends and claim 45p per mile or train expense

That's it. Keep it simple.

[Bluenose]

Hi all,

Do you just go for ones that have all bills included like electricity, gas, internet, & council tax or do you pay those bill also through the company?

I would put all bills related to the rental through company apart from daily travel expenses and food shopping.

Do first month in hotel then sign 6 month tenancy, negotiate 5 months of tenancy renewal if contract runs the full term.

[GillsMan]

Hobo's advice above is excellent, particularly the bit about gauging the client whilst staying at a hotel for the first couple of weeks. I don't have a lot to add, but I just wanted to add something about the risk of signing a tenancy agreements vs the possibility of getting canned by your client.

As a long-term renter, I've never had any problem exiting a lease early. If you tell your landlord that you've lost your job (downplay the business owner bit, and talk like a permie), in my experience, they can't get you out quick enough. No landlord wants a tenant to stay who has lost their job, and is possibly going to accrue a load of debt.

You may find you have to pay the landlord's readvertising costs (usually £150-400), and some will hold you to staying until the property is filled - which in London will take about 5 minutes - but in general you should be able to exit your lease if you get canned and can't find another gig. Personally, I prefer staying in hotels, but a) I live in the South East anyway and b) I've never had to stay in hotels long term (aside from a three month stint in Eindhoven and that was aaaaaawful) but I totally get why leasing an apartment would be ideal compared to a hotel.

Sorry I can't answer the OP's direct question, but I hope this is useful anyway.