Staff accommodation without a rental value or RV

Staff accommodation without a rental value or RV

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sounds straightforward but the scenario is this:

Client is opening a new restaurant business and has allowed 2 members of staff to use the flat above but...

the only access is through the restaurant (so would not be able to be let on open market).

The utilities are those used by the restaurant.

The lease does not define the residential part but is a lease of the whole building (4 stories including basement),

There is no exemption for security or any other allowable reason.

There is however a separate domestic council tax bill for the flat. 

The benefit is obviously there if they pay no rent but how does one put a value on it without at least a RV? (converted to accommodation well after 1990) Client needs to know an idea of any Class 1A costs to decide where, if at all, to pitch a rent figure. 

Anyone been here before?

Littlerich

Replies (4)

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By cathyne
29th Aug 2014 11:19

wages

presumably the level of wage reflects  the 'live- in' element?

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By pjones
29th Aug 2014 11:44

Not uncommon

This is a situation very prevalent in pubs/restaurants.

I have always looked at an appropriate average rental value for a similar sized property in the area (Rightmove/Zoopla etc) then taken a discount for the fact that it is above a pub.  This figure has then been reported as a benefit.

Not strictly correct but never had any arguments over this with HMRC! 

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By pjones
29th Aug 2014 18:24

discount
I have seen a whole range - often up to 50% however this would all be subject to HMRC scrutiny - some Inspectors would allow without a second thought whereas others would take a much harder line.

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