Rent a room scheme vs use of home as office

[Scotslaw]

If I rent out a furnished room in my primary/only home and have gross earnings of <£7500, I am eligible for tax relief under the rent a room scheme.
https://www.gov.uk/government/public...scheme-2017--2

My confusion lies in the fact that my home is also registered as my company office and I claim a nominal £3 per week for use of home as office.
HMRC’s guidance on the rent a room scheme says that the relief can’t be claimed is the ‘accommodation’ is used as an office or for any business.
My accountant has guided me that the 2 can coexist because:
1. My claim for use of home as office is under £4 per week, therefore not considered material by HMRC
2. The furnished room in question isn’t the room designated as my work space… that is a separate room
I wanted to check if this view is correct.
Do others here have any experience in this?

Can the rent a room relief be claimed if your home is also your registered company address?
Can the tax relief on rental income be claimed at the same time as claiming the nominal expense for use of home as office? Or would the expense claim need to be sacrificed in this scenario?

[northernladuk]

My confusion lies in the fact that my home is also registered as my company office and I claim a nominal £3 per week for use of home as office.

1. My claim for use of home as office is under £4 per week, therefore not considered material by HMRC

Wut???

Are you using the same room? Even if you are surely you aren't using it as an office at the same time you have a tenant in? Actually it doesn't matter. You don't have to say which room you use as the office. It could be the kitchen table. So IMO the two are completely separate... and that's what your accountant said so I'd say you are in the clear.

But even if you've got the seed of doubt in your mind why not just drop the office rental. It's peanuts. You don't need to, but if it really helps you sleep at night.

[Maslins]

I'm not 100% clear from your OP...does your home have an actual third party human tenant in it, paying you rent to live there?

If yes, then I don't see any issue with you using "rent a room" relief against that, and also claiming £4/week use of home as office. Two separate things.

If not, and you're asking can you charge your Ltd Co £7,500 rent as tax free "rent a room", my answer is "no".

[WordIsBond]

You are confusing yourself because you aren't thinking clearly on the term "accommodation."

The "accommodation" is the room you are letting out. In the guidance, it talks about it being part of your home. It isn't talking about your entire home, just the part you are letting out. Presumably your tenant has access to more than that room, but he/she/it/they has/have one room that is their space, and that you are letting.

If you are using that particular room for your home office, you have a problem. If you are using a different room or multiple different rooms or the back garden or a desk perched on the roof for your home office, that is not the accommodation you've rented to them, and there is no issue.

[Scotslaw]

Thanks very much guys!

Are you using the same room? Even if you are surely you aren't using it as an office at the same time you have a tenant in? Actually it doesn't matter. You don't have to say which room you use as the office. It could be the kitchen table. So IMO the two are completely separate... and that's what your accountant said so I'd say you are in the clear.
But even if you've got the seed of doubt in your mind why not just drop the office rental. It's peanuts. You don't need to, but if it really helps you sleep at night.

No, not the same room, separate room. But that’s a good point… I’m considering dropping the measly £12pm to get the extra tax shelter.

I'm not 100% clear from your OP...does your home have an actual third party human tenant in it, paying you rent to live there?

If yes, then I don't see any issue with you using "rent a room" relief against that, and also claiming £4/week use of home as office. Two separate things.

If not, and you're asking can you charge your Ltd Co £7,500 rent as tax free "rent a room", my answer is "no".

Yes, I was asking about tenancy with an actual human tenant, I wasn’t asking if I could charge rent to my company 

You are confusing yourself because you aren't thinking clearly on the term "accommodation."

The "accommodation" is the room you are letting out. In the guidance, it talks about it being part of your home. It isn't talking about your entire home, just the part you are letting out. Presumably your tenant has access to more than that room, but he/she/it/they has/have one room that is their space, and that you are letting.

If you are using that particular room for your home office, you have a problem. If you are using a different room or multiple different rooms or the back garden or a desk perched on the roof for your home office, that is not the accommodation you've rented to them, and there is no issue.

That clarifies things, thanks WordisBond!