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View Full Version : To rent a room or to rent a house...



gsis
8th July 2012, 14:48
Guys a newbie here and I have done a serious amount of homework on the subject..and all is good. And this forum has helped a lot so thank you for that.

my question is obviously up to me but i wanted to ask what others are doing, especially as i can offset the rental as an expense.

basically i can take home more a month if i pay more for a rented Apartment or house as i can expense it say 1200 per month for a house

and a double room ( so i travel home at weekends ) is 700 per month

now i take home less after tax if i just take the room so I was going to rent my house and rent an apartment or house and take home more - other wise the tax man gets it..

now to me its a no brainer but i am paying more and taking home more.... something doesn't add up!

its a year contract.

what are others doing?

Pondlife
8th July 2012, 15:17
I can't follow your logic.

If this is your main residence you can't expense it.

bless 'em all
8th July 2012, 15:56
If you're spending it then it's not 'take home' is it? You will pay tax on PROFIT but not EXPENSES. Plus, like PL said, if you have a house and don't 'go home' then it's your main residence and you can't expense it at all.

Personally I rent a room, having just lucked out where the other tenant works away Mon-Fri so I have the place to myself. :happy

gsis
8th July 2012, 16:14
Sorry for being a newbie - i realise its not take home as such if you spend it but its available to spend without being taxed. And for a few hundred more you get your own place.

And i agree with the residence rule however my accountant says i can expense as i will still own my own home and not pay tax ( as long as i don't make a profit after agency fees )

they said that the HMRC don't see the point in a house sitting there empty so as long as no profit is made you can expense the rental..

just going on what i have been told and by a highly recommended acountancy firm on here...

is this not the case?

Kanye
8th July 2012, 16:48
Your company is either paying £700 for the room or £1200 for the house. That's the main financial consideration.

However, if you take the house instead of the room, you effectively save 20% corporation tax on the £500 difference, so £100 less per month corporation tax bill because of your higher expense. The house is still a net cost to you and your co of £400 extra per month though.

If the property is wholly and exclusively for your business purposes then it's expense-able. If you are staying there at weekends and using it for other purposes not associated with carrying out the business, then it is not expense-able, regardless of how many houses you own elsewhere.

gsis
8th July 2012, 16:52
Yes it will all come in time.. :ohwell

I will check again with my accountant but i was told i could do this. I would rather not be way 5 days a week as it is a year contract. I could make the rented property my business address then its solely for business purposes or is that ill advised.

Pondlife
8th July 2012, 18:03
Yes it will all come in time.. :ohwell

I will check again with my accountant but i was told i could do this. I would rather not be way 5 days a week as it is a year contract. I could make the rented property my business address then its solely for business purposes or is that ill advised.

Wrong.

Old Greg
8th July 2012, 18:09
Are you any good at bleeding radiators?

SueEllen
8th July 2012, 19:34
Personally I rent a room, having just lucked out where the other tenant works away Mon-Fri so I have the place to myself. :happy

There are quite a few people around who do that or are night workers so you never see them. :smile