rent a room and limited company

qzfgvj

Hi I have a ltd company which has made losses for the last two years, I am thinking of renting two rooms in my house and am wondering if I can put the rental through my ltd company and off set my loss on my main business which is a very small retail business. I am thinking if I rented both rooms for say £100 per week (for ease of caulation) that would be 5200 x 2 = £10,400 deduct the renta room of £4250 and I put the £6150 through my ltd company to ofset my losses (which are about £2000), pay the profit in dividend, is this feasible? anything I should consider, would I have business rates as using a ltd company? any help much appreciated as have scoured the web and cant get a simple answer to this. Thanks

HappyMJ

Nope it's not feasible. You have a choice to pay tax on all you receive in excess of £4,250 or to use the normal income-expenses method.

00ec25

the Ltd company cannot claim the resident LL rights that underpin the rent a room scheme that is the simple answer
So it will be your personal income as the resident LL so its an item for your personal SA return not the company's accounts

chrismac1

Strictly also under corporation tax rules the loss can be carried forward against profits from the same trade. On the face of it this is a different trade.