HMRC tax relief on rental property new contract

[Geoffnewcontractor]

I have recently started work on a extended contract (18months) which distant from my home. I have doing a mix of long distance commute and hotel stayovers returning home at weekends. Can I claim rental costs for a property (flat/house) where I work? I have just been offered a mobile home for rental significantly cheaper, would that qualify for HMRC relief as well?

[Martin at NixonWilliams]

I have recently started work on a extended contract (18months) which distant from my home. I have doing a mix of long distance commute and hotel stayovers returning home at weekends. Can I claim rental costs for a property (flat/house) where I work? I have just been offered a mobile home for rental significantly cheaper, would that qualify for HMRC relief as well?

Broadly speaking, renting a flat or house should be ok providing it is a cheaper alternative than staying in hotels. Be aware of the 24 month rule and any notice you might need to pay if your contract is cut short.

It is fine to claim for a mobile phone but you should ensure the contract is in the name of the company and is paid from the company account.

I hope this helps.

Martin

[Scruff]

Mobile Home, not Mobile Phone

[Project Monkey]

Mobile Home, not Mobile Phone

[Martin at NixonWilliams]

Oops.. a mobile home is a bit more complicated!

The guidance does not cover this sort of thing, but if it is more affordable, is a temporary workplace and there is no dual purpose then there is a possiblity this could be claimed.

The dual purpose test might prove difficult if the home is located in a holiday park for example. I would avoid staying at weekends and friends/relatives staying there.

[perlpilot]

Oops.. a mobile home is a bit more complicated!

The guidance does not cover this sort of thing, but if it is more affordable, is a temporary workplace and there is no dual purpose then there is a possiblity this could be claimed.

The dual purpose test might prove difficult if the home is located in a holiday park for example. I would avoid staying at weekends and friends/relatives staying there.

Surely the mobile home will be more affordable than hotel. And with regards to friends/relatives, if your spouse/friend stayed there during the week, surely you could leave off a bit (say 10%) of the expense? As a BIK?

I've always wondered (and my former accountant didn't seem interested in finding out) if someone stayed at a rental place with you during the week, and they were also an employee of the ltd (say your spouse employed part time as bookkeeper and manager) ... that there would be no BIK at all, if both employees returned home on the weekend, and the main home wasn't let out.

[TheCyclingProgrammer]

If you search on here there is a big thread discussing the pitfalls of a spouse staying with you in rented accomodation.

IIRC, there isn't anything inherently wrong with it but if HMRC queried it it could give rise to claims of there being duality of purpose.

IMO as long as it's clear that there was a sole business purpose for the rental then a spouse or partner staying over from time to time shouldn't change that but you have to look at things in context. If the rental was say, in a nice part of the country and your spouse stayed with you all the time it might look like you are using it as a bit of a holiday home.

[stek]

Oops.. a mobile home is a bit more complicated!

The guidance does not cover this sort of thing, but if it is more affordable, is a temporary workplace and there is no dual purpose then there is a possiblity this could be claimed.

The dual purpose test might prove difficult if the home is located in a holiday park for example. I would avoid staying at weekends and friends/relatives staying there.

I knew a contractor who stayed in such a field in Ecclefechan ('Fechan to the locals - birthplace of Thomas Carlyle) he was sat in a 'Fechan field in a caravan with a calor gas heater for winter and I kid u not, a 10' B&W telly with a choice of Border TV or STV for viewing in 425 lines, not for me...

He was from Blackburn, so that was probably a treat......

[Martin at NixonWilliams]

Surely the mobile home will be more affordable than hotel. And with regards to friends/relatives, if your spouse/friend stayed there during the week, surely you could leave off a bit (say 10%) of the expense? As a BIK?

If somebody is living with you then I would suggest claiming no more than 50% of the cost. This sort of arrangement is likely to be questioned if looked at by HMRC as the costs in total are clearly not wholly and exclusively for business purposes.

I've always wondered (and my former accountant didn't seem interested in finding out) if someone stayed at a rental place with you during the week, and they were also an employee of the ltd (say your spouse employed part time as bookkeeper and manager) ... that there would be no BIK at all, if both employees returned home on the weekend, and the main home wasn't let out.

I cannot see how this could work. The contractor is allowed a deduction for the costs of working at a temporary workplace as it is necessary to be there to perform their contract. In your example, the spouse would not need to be there and the work is unlikely to amount to any more than a few hours per month.

[expat]

Surely a mobile home is a vehicle and therefore subject to car benefit?