Contractor renting a flat via limited company

Contractor renting a flat via limited company

Didn't find your answer?

Client (limited company director) is planning to rent a flat close to a temporary workplace which satisfies the 24 month rule. 

Two pretty large problems are immediately apparent to me:

1) The client is separating from his wife and, while he will maintain ownership of, and a mortgage on, the family home, he is unlikely to return to the family home at weekends.

2) The temporary workplace is really not very far from the family home.  It is about 10 miles away, i.e. within a very reasonable daily travelling distance.

Can I just check that I have not missed anything which would allow the limited company to expense the rented accommodation in its accounts, and for this not to be a BIK on the client?  It seems pretty clear-cut to me.  The "principal private residence" cannot be so if the client doesn't live there any more, and in any case there is not really a business case for a company to rent a flat for an employee just 10 miles from their family home.

Many thanks.

Replies (1)

Please login or register to join the discussion.

By JCresswellTax
17th Jan 2014 09:18

I agree

I think HMRC would almost certainly seek to disallow the flat rent in the company accounts, or charge a BIK on the director.  I think point 2 is the most important in this regard.

Thanks (0)