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Rented accommodation

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    Rented accommodation

    Hi all,

    Looking for some advice. . .

    Planning to get a rented accommodation near my current 12 month contract and will be retaining my home (mortgaged).

    The girlfriend has an opportunity to work near me (in London) also via her permanent employment (so we can be together during the week) but will not receive expenses via her work.

    The question is : if we both use the rented accommodation, will it invalidate my ability to claim it as a business expense via the ltd company?

    If I were to add her as a company secretary / employee, would that alter the position?

    Cheers, Luke

    #2
    Originally posted by lukeyh View Post
    Hi all,

    Looking for some advice. . .

    Planning to get a rented accommodation near my current 12 month contract and will be retaining my home (mortgaged).

    The girlfriend has an opportunity to work near me (in London) also via her permanent employment (so we can be together during the week) but will not receive expenses via her work.

    The question is : if we both use the rented accommodation, will it invalidate my ability to claim it as a business expense via the ltd company?

    If I were to add her as a company secretary / employee, would that alter the position?

    Cheers, Luke
    Yep (as it would be dual purpose and not solely for business use) and no it would make no difference.
    Last edited by eek; 13 July 2014, 21:21.
    merely at clientco for the entertainment

    Comment


      #3
      Wrong forum. Suggest this is moved.

      Comment


        #4
        Originally posted by eek View Post
        Yep (as it would be dual purpose and not solely for business use) and no it would make no difference.
        Not sure about this. I've always thought that "duality of purpose" meant that there was more than one intrinsic purpose for a particular expense. Key word being "purpose". Dual use is not the same as dual purpose.

        If the only reason the flat was rented was to save on travel expenses for the contract and OP would be incurring expense regardless of what his partners situation, then subject to all the usual rules about temporary work places and accomodation, I would say there is just one sole purpose.

        If other hand OP is only considering renting as it would be cost effective for both of them and wouldn't otherwise be considering it, then I'd agree there was duality of purpose.

        It's somewhat similar to when you buy an asset such as a laptop. So long as its wholly and exclusively for business purposes (note: not business "use"), i.e. you're only buying it as you need it to do your job, then any non business use of the asset is considered to be "not significant", even if there was something like a 50/50 business/personal use split.

        As long as you can clearly identify the business purpose for renting the flat, and it's the sole purpose, then the I would say the OPs partner being able to make use of the flat as well would be an incidental benefit:

        http://www.hmrc.gov.uk/manuals/bimmanual/BIM37400.htm

        Practically speaking, I'm not sure HMRC would ever know that the flat was sometimes being shared with OPs partner and if I was OP and needed to rent the flat for business purposes I wouldn't let something like this from stopping me claiming it.

        If you wanted to take a more cautious approach, it might be prudent to have sole use of the flat for the first month perhaps; this would make it harder for a dual purpose argument to be made IMO.
        Last edited by TheCyclingProgrammer; 13 July 2014, 23:03.

        Comment


          #5
          Originally posted by dezze View Post
          Wrong forum. Suggest this is moved.
          No, it's the right forum, I've moved it from the wrong forum. He's asking an accounting question.
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
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          Comment


            #6
            What TCP says might be theoretically correct but I can't see that washing for one minute. The fact his partner is living there whilst working at her permanent work blows it all out of the water. They then add staying over at weekends etc. I can't see them having a hope in hell of explaining that one away.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              And how would HMRC know if he shares the accommodation with his GF ,and staying over the weekends sometimes? Post a detective at the front door to follow his every move?

              In Theory it won't be legal, in practice - there is no way for HMRC to prove it.

              It's similar to buying a laptop or 2 for the business, how many of us are actually doing it "solely and exclusively for business".....

              Comment


                #8
                Originally posted by sal View Post
                And how would HMRC know if he shares the accommodation with his GF ,and staying over the weekends sometimes? Post a detective at the front door to follow his every move?

                In Theory it won't be legal, in practice - there is no way for HMRC to prove it.

                It's similar to buying a laptop or 2 for the business, how many of us are actually doing it "solely and exclusively for business".....
                If your attitude to claiming expenses is "HMRC probably won't find out", then why limit it to just claiming accommodation when you shouldn't?
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                Comment


                  #9
                  OP

                  I think that you need to take heed of your Accountant's advice. I recall that 9 years ago, I was told that if I had registered for Council Tax at away location, then it wasn't allowable, as well as the fact that if I entered into an AST it would indicate "permanence". Hence, my decision to stay in an hotel, or rent a room Monday - Friday, all bills included.

                  Adding your GF to company as Secretary or making her an employee has no effect and is downright foolish.
                  Last edited by Scruff; 14 July 2014, 09:30. Reason: spelling
                  I was an IPSE Consultative Council Member, until the BoD abolished it. I am not an IPSE Member, since they have no longer have any relevance to me, as an IT Contractor. Read my lips...I recommend QDOS for ALL your Insurance requirements (Contact me for a referral code).

                  Comment


                    #10
                    Originally posted by sal View Post
                    And how would HMRC know if he shares the accommodation with his GF ,and staying over the weekends sometimes? Post a detective at the front door to follow his every move?

                    In Theory it won't be legal, in practice - there is no way for HMRC to prove it.

                    It's similar to buying a laptop or 2 for the business, how many of us are actually doing it "solely and exclusively for business".....
                    But if they do, and it is possible, then you are facing charges of either fraud or evasion or possibly both. Declaring a situation you know not to be true will not be taken lightly. If you think that is worth a 20% saving on the accommodation you were going to pay anyway then fill your boots. While you are at it you might as well completely falsify your books and get some proper money back from it.

                    Laptops are a poor example as there is an understanding that some home use is allowable on them.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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