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Corporate rent

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03 July 2012
Issue: 4360 / Categories: Forum & Feedback , Business , Income Tax
A client operates his consultancy through a limited company. The business is run from his home, which is in fact his parent’s main residence where he also lives. Could the company pay a rent for its accommodation with receipt being exempt under the rent-a-room scheme provisions?

We have a client who runs a consultancy through a limited company and – like many other directors we suspect – the business is run from home and much of the administrative and communication work is carried out from the house.

However in our particular case the sole director lives at home with his parents and wants to pay his father some rent through the company under the ‘rent a room’ scheme. Is this possible and if not can the same effect be achieved by an alternative method?

For example what if our client pays his father rent under the rent-a-room scheme and charges the company a proportion to reflect the company’s use of the property heat light etc? Readers’ advice is welcomed.

Query 18 018 – Lodger

Reply from Socrates

HMRC do not like the situation where the...

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