A new client we have picked up operates a caravan park through a limited company. One of the Directors (also a substantial shareholder) lives in a house on the site, which is owned by the company.
Is there a P11d benefit here? On referring to HMR& C guidance an employee would ordinarily be exempt from such a benefit, in accordance with para 21.2 of their Notice 480 guidance, and on the basis that the accommodation is necessary for the employee's duties. However para 21.3 goes on to state that this exemption does not apply if the director has a material interest in the company.
However, does anyone have any experience on this for caravan parks, and who has may be argued to HMR&C that such a Director could be exempt from a benefit?
Any thoughts would be appreciated.
Thanks
al
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Replies (4)
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Assess and Allow
It is the use of a company asset, therefore 20% of value plus running costs. However, attendance on site is business travel therefore the costs (including the tax value of the asset) would be deductible under s336. As long as it is not available for private use there should be no additional tax to pay.
Caravan used instead of B & B's
A similar issue arises with a client of mine. The construction company, and its two working directors, take a caravan to work sites to live in for the odd days of the week they are on site, and it is too far to commute to save B & B costs. They have a home that they return to at weekends or on days they are not required on site.
Comments on whether this is the provision of accommodation, or use of an asset at 20% or what? If the company paid for hotels or B & B's the cost could be covered on a dispensation and would not be a benefit!
Pay rent
Hi
Why not pay a rent to the company for living on-site. Dividends can be taken to cover the rent paid.
Assuming no HR taxpayer no tax effect except for 21% CT on the rental income. No NI due.
No argument
The guidance is based on the law. The "proper performance" clause does not apply to directors who have a material interest in the company - s99(3) ITEPA 2003.