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Disclosure of rent paid by company to director

I have clients who charge their company a commercial rent for the use of their home. This is reported in their personal tax returns. However I am not sure if this should be disclosed as a related party note in the accounts? If the accounts are prepared using FRS105 (as a micro entity) there is no option to disclose it, but could this be an issue with HMRC? It is not clear from the accounts otherwise that the rent is paid to a connected party. Should the accounts be prepared under FRS102 with a related party note so that HMRC are aware of this. Has anyone else come across this and how did you deal with it?

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22nd Mar 2019 14:44

If the accounts are prepared under FRS105, forget disclosure; and don't bother with moving to FRS102 just to 'please the Revenue' - I doubt they even read the accounts you send them.

I think (and hate) the new reporting under FRS102 which seems to suggest only reporting transactions between related parties that are not commercially justifiable. I've seen an article somewhere suggesting that ANY VALUE could be argued as being 'commercially justifiable' and therefore nothing needs to be disclosed

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