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‘Work’ flat

Clarification of treatment please

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Mr X lives in Manchester. He bought a 2 bed flat in london in Dec 17 so that he would be nearer his place of employment during the week, home at the weekend.

Summer 19 he leaves job and starts X Ltd, a 1-man mgmt consultancy co. London flat becomes reg office and is used 4/days week as office/base whilst in UK (short-term eg 1 month assignments sometimes taken overseas). When in UK & not working, he lives/stays in primary home in the North. 

Client wants to move all flat expenses (mortgage interest, council tax, utilities etc) to co bank account and allow for CT. 

I think that they are personal costs but we can use HaO which would reclaim a high % anyway. 

Who is right, or is there something else?

Would he need a rental contract w/ the co?


Replies (3)

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29th Nov 2019 09:39

Whether the bills are paid out of the company account is mostly irrelevant, as they are paying a director's personal bills, and therefore should be debited to the DLA. What the director should do is either charge an appropriate rent to his company, or else claim an appropriate proportion of the flat's running costs as expenses. He can't claim 100%, as it is not temporary accommodation.

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Replying to JDBENJAMIN:
By atleastisoundknowledgable...
29th Nov 2019 09:47

So as I thought then.

I was going to go with 4/7, as he’s there 4 days a week ...

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Replying to atleastisoundknowledgable...:
29th Nov 2019 10:57

On your head be it! Being there does not mean he is on company business. The only proportion I would claim is the space or time used on company business, and that is hardly ever more than 20%, despite whatever clients say.

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