Limited company renting property

Fran

Hi everyone

I have really confused myself with this, i've been thinking about it too much!

A client, who is the sole director and only employee of a Limited company has won a contract in the South of England (he is based in the North), which requires him to be on site Monday - Friday. He asked if renting a house down there, for the duration of the contract, would be tax allowable for the company?

Any input would be much appreciated, i have been going round in circles with this one!

Fran

elliep

I would say it is. It is an expense to the business as long as the bill is paid for by the limited company. It would just be the same perhaps as staying in a hotel. However, I would check with HMRC on this point just to be sure!

Poodle

Hi Fran,

Normally this is allowable as a business expense and is also not a benefit in kind providing the accommodation is provided wholly, exclusively and necessarily to enable proper performance of the employee's duties. You would normally put a clause in the employes contract of employment to this effect as well.

However, where accommodation is provided by a company fr a director then I think that you will find that the exemption only applies where the director:

a) has no material interest n the company, and
b) is a 'full time working director' or the company is non-profit making or a charity.

So, I would as ellip says provide your local compliance office with full details and request guidance.

Poodle

Fran

Thanks for your help, I was looking in to it for ages and it seems to be a bit of grey area!

Fran