View Full Version : Renting Accomodation and claiming expenses.

1st August 2004, 20:56

I am a first time contractor and have not been able to find enough information regarding renting accomodatin and claiming back as expenses.

All I have found so far is that unless you only rent for 5 days a week, you cant claim rental costs. Is this true, and how on earth do you find someone to rent porperty to you on a 5-day basis?

Can you just claim 5/7ths of the total rent?

What about other bills such as elec, gas, water, sky, cable, internet..?

My contract is a long way from home, so its neccessary to rent another porperty to live in during the week, and its cheaper than staying in a hotel...

Any help appreciated.

2nd August 2004, 08:54
The Revenue let you claim the cost of weekend stays in rented accommodation (subject to the usual 24 month etc rules) even if you're not working over the weekend. The Revenue will let you claim the cost as long as the use is incidental to the main use. There's something about it in one of the Revenue Manuals.

Remember, however. that this is concessionary i.e. they don't have to stick to it, but it's unusual not to get it.

2nd August 2004, 09:04
>The Revenue let you claim the cost of weekend stays in rented accommodation
>(subject to the usual 24 month etc rules) even if you're not working over the weekend

Eh, I think you would have a hard time trying to convince an IR inspector that the weekend you spent with the Mrs at the Lake District (or even London), was really business related ...

Back to the original question, use common sense when claiming expenses. It all has to be business related. Renting a place will usually be long term and trying to be IR35 friendly isn't as easy.

Just my opinions.

2nd August 2004, 09:30
I was talking about accommodation near to the contract site, of course, and like I said the treatment is confirmed in the Revenue's guidance notes.

Renting a place will usually be long term and trying to be IR35 friendly isn't as easy

The length you rent temporary accommodation should not have any bearing whatsovever on your IR35 status. At the end of the day it's meant to be temporary and implies a move back to your permanent accommodation.

2nd August 2004, 09:59
Hi Morphman,

You can claim the cost for renting if you are still maintaining a propery elsewhere and are receiving no income from it. You can claim for council tax but you cannot claim for utility bills as those costs will correspondingly reduce in your main property as you will not be there.

Hope this helps.

2nd August 2004, 10:30
Agree with Bradley and Co. above.
I badly phrased what I was thinking.

I was thinking that when you rent you're either on 6 months or 12 months rental contract. If you're being on site for 13 months and then sign a 12 months contract this takes you above the 24 months and hence at that point you can't claim (it's at the point of when you know you're hitting the 24 months limit)

The other point I was thinking of was the IR35. I can't remember and somebody correct me, but if you're inside then it's going to come out of the 5 percent business allowance. Considering how much rent is, I'll be surprised if the 5 percent is going to be enough.

Hope this clears up what I was thinking of.

2nd August 2004, 13:00
Thanks for the replies guys.

Would I rent the flat via my limited company, or rent it in my personal name, and claim expenses back from the company account?

Also, can you confirm that its just Rent and Council tax that I can claim?

2nd August 2004, 13:01
I've recently switched umbrellas. The old one made no mention of being able to claim for rental accomodation. I'm caught be IR35, and inside the 2 year maximum. The new umbrella made mention that I'd be able to claim it, but I assumed this was just spiel to get me to sign up with them. I tried searching through the mire of the IR website, but couldn't find anthing directly related to the situation. Would like something concrete before I try and claim for it.

2nd August 2004, 13:50
I'm rapidly coming to the conclusion that the chap I worked with who had a company caravan had the right idea.

All he was paying for was the plot on the caravan site & services, which came to a lot less than £40/night in some poxy hotel.

He was taxed on a benefit in kind when it was used for family holidays though....

2nd August 2004, 13:52
Since moving to London, I obviously do not drive to work any more, and so do not claim my 40p a mile car journey to work (as non-billable travel expenses) to the IR.

But can I claim that part of my travelcard usage is for work purposes, and therefore can I claim back the cost (or part thereof) of my monthly travelcard against tax?

what's the experience of London-based contractors?

Thank you

2nd August 2004, 16:42

I have done the following:-

Rented a house with the tenenancy agreement in MyCos name. All utilitiy bills were sent to that house - in the name of the company (might stuggle with council tax, but it was OK previously).

In a subsequent compliance review IR got a cob on, so I accepted 10% of the total paid by the company as BIK. [Some weekends wife would come to there rather than me go home etc].

And more recently:-

I personally bought a property close to where my main clients were. I claimed on expenses from the company:-

Mortgage interest
Council charge

IR were perfectly happy, I also reduced the expense claims by 10% to cover personal use.

3rd August 2004, 17:24
ContractorUmbrella, what do you mean by "you are still maintaining a propery elsewhere"?

Like Ronald (http://p201.ezboard.com/fcukfrm4.showMessage?topicID=647.topic), my home in London is a family property, so there's no mortgage, and my other family members' names are on the bills. But I contribute to these bills, and having to travel for my contract(s) means I incur very high costs while I'm on the road (incl. hotels and/ or rental) that I wouldn't otherwise have.

How does the Revenue define a home property? What constitutes "maintenance"? Is there a precedent/ ruling or some official documentation that defines this?

3rd August 2004, 18:19
Where on earth didyou come up with that 5 day only thing? It's crap. Subject to usual rules re 24 months etc. you can indeed claim costs of the weekly rental where a flat is rented as an alternative to a hotel. It does say this in booklet 480, you need to read it a bit more carefully. There might I suppose be a query if the family came to stay every weekend as they could claim it is partly for personal use but otherwise should be no problem.

You can also claim associated expenses like electric meter, cleaning etc but not rates. These are travel and subsistence costs claimable in addition to the 5% IR356 allowance.

Anything claimable theoretically has to be an extra cost undertaken for business reasons so if you did simply move around the country renting only near the contract site and had no home elsewhere I think it is correct it would not be claimable.

PS Dont forget PIEs.
PPS Whatever happened to the Paedophile Information Exchange?

4th August 2004, 09:47
Xoggoth, presume your post was directed at Morphman. If so, I'm in agreeance - the Revenue's own guide on expenses (booklet 480) states:

21.14... If accommodation is provided for an employee, for example in a flat or hotel, while the employee is on business duties away from his or her home and normal place of work, the cost of this may be allowable as a deduction under the expenses rule.... If the accommodation is no more than an alternative to hotel accommodation and is not available for private occupation the whole cost of renting and running the flat may be allowed as a deduction.

However, it also states:

21.14... The extent of any tax allowance will depend upon the circumstances.

This still doesn't answer the question of what yardstick the Revenue use to define one's "home". ContractorUmbrella refers to "maintenance", but there is no such reference in booklet 480.


4th August 2004, 10:00
Hello Clement,

It just means that the rental property would not be your only place of residence and therefore not your only property cost. You could not claim expenses for rent if you left your rented flat for another rented flat 50 miles down the road because it was nearer to the contract site as you had incurred no additional expense by doing so

4th August 2004, 15:19
Hmmm, I understand that if I'd closed one rental for another closer by, my claim wouldn't be valid.

At the same time, the litmus test of "only property cost" is dubious. I live in London with my family. I contribute in kind and in cash toward the upkeep of the property, but I my name is not on any mortgage or rental agreement. As I'm an Australian national, I've no registration on the electoral roll to prove my residence there either.

So, by being away for work around the country, I'm certainly incurring additional property cost (esp. with hotels!). Surely this is claimable under the Revenue's regulations? There's many people who don't pay to "maintain" the property they live in...

4th August 2004, 15:29
Relief should not be restricted for furnished or unfurnished accommodation that is of reasonable cost where it is also able to be used by the employee for weekends, short holidays during the period of work at the temporary workplace or other short non- working periods. Relief should be restricted where significant non-business use is part of the purpose of providing the accommodation
From IR SE Manual - www.inlandrevenue.gov.uk/manuals/senew/SE31836.htm (http://www.inlandrevenue.gov.uk/manuals/senew/SE31836.htm)

5th August 2004, 16:27
But presumably Clement you would not still be contributing to the cost of your family's property whilst you were working away?

5th August 2004, 17:23
That's correct ContractorUmbrella, but I'm still incurring additional costs by having to be away on business. These are considerable when I've no other option than to stay in a hotel. Just because I live in my family home, I shouldn't be dealt with unfavourably.

In fact, after reading the materials Bradley sourced his quote from, it seems the Revenue's own documentation confirms my argument. Please see my post(s) on the other thread (http://p201.ezboard.com/fcukfrm4.showMessageRange?topicID=647.topic&start=1&stop=20) and comment accordingly.

5th August 2004, 21:39
Thanks for the responses.

In response to Xoggoth and his question where I got the info regarding only renting for 5 days a week.

I was interested in joining parasol for an umbrella company (I have since gone ltd myself), but in their expense guidelines it says you can only claim rental costs if you are renting on a 5-day basis, and not for weekends.

Section 3.5

www.parasolit.co.uk/repos...0Guide.pdf (http://www.parasolit.co.uk/repository/documents/Member%20Expenses%20User%20Guide.pdf)

I am fairly new to this contracting business, so forgive me that I have yet to fully read up on all of the IR's advise booklets.

Thanks for pointing out that expnses are indeed claimable

6th August 2004, 12:08
I've recently joined Parasol and noted that 5-day restriction too. But the agent I spoke to said it was not the case, and gave me a calculation of weekly rent, divided by 7 days, and to claim for 5 day's worth of rent. So, is this a legitimate expense I can claim?