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Paying a friend to stay at their house.

Hi,

I have a client who is a director of a limited company who has to go to meetings in London. Sometimes he stays at a friends house instead of staying in a hotel. The director wants to pay his friend an amount of money, say £50 a night, for staying there instead of paying £100+ to stay in a central London hotel. The company does not have any kind of dispensation in place.

If the company were to reimburse the £50 what would the tax implications be for the director?

Am I right in thinking there would be no tax or NI payable by either the director or the company with the only implication being that the reclaimed expense should be included on the P11d?

If you could point me in the right direction of the guidance on the HMRC website, that would be fantastic.

Many thanks

Burbage Accounting

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By alattax
13th May 2012 17:34

Yes, if there is no dispensation the reimbursement should be included on the P11d and a claim made by the director for business use. No NI to pay and no tax as no overall benefit for the director.

http://www.hmrc.gov.uk/helpsheets/490.htm

Strictly, the friend should disclose rent a room (as long as within limits) on his tax return if registered for self assessment.

 

 

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14th May 2012 09:24

Many thanks for the help alattax that was perfect.

Kind regards

 

Burbage Accounting

 

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