Letting my house to pay the rent on my accommodation

heretolearn_2

Is see what you are getting at.

Yes, it is possible for your employer (your company in this case) to provide you with a home as part of your recompense for working. In most cases, however, this is then just a benefit in kind and you pay tax on it in that way - otherwise we'd all be doing it! There are very specific exceptions to this in tax legislation, whereby it has been accepted within the legislation that certain professions are required to live on site and have accommodation provided for them. The two main ones that come to mind are Ministers of Religion and agricultural workers (your friend either pays tax on his home as a benefit in kind, or forestry is another exception). Your accountant needs to look into this aspect for you - this is an example of where a proper tax accountant is worth it for small businesses rather than someone who just sticks your figures in a tax return and that's it. It's not enough that you think you need to live on site, there is a very specific list of professions that qualify.

StillBlue

@gibson123
Many thanks for the advise, this is my plan should there be no other way, as it does minimise the actual income I make from the property, as there is quite a few expenses associated with renting it out.

@heretolearn
Thank you for the above advise. Yes, I think going back to accountant is definately the plan. I just didnt want to find myself a year on, completely broke, just to find someone say 'why didnt you do xyz'. I am trying to make sure I cover all possible options.

laurel7172

The profit you're making on the letting may have reduced the tax credits, but it won't be by a crippling amount more than the after-tax income you've gained by the let, so I guess that what's really stretching you is the difference between the mortgage you were paying and the rent you're paying now.

While I have every sympathy and respect for somebody working 16 hour days to keep their business going (*and* keeping others in employment at the same time), what you're asking for is impossible. If it were possible, every landlord in the country would be making similar claims for tax free income. I'm sure it must be hugely frustrating when, practically speaking, one rent is a direct replacement for the other, but legally they just aren't.

As you've said above, probably the only way to reduce your expenses to the previous level is to sell up and buy a house closer to your business. But whatever you do, I wish you well.

StillBlue

That is pretty much the problem but its not the difference between mortgage and rent as I am still paying mortgage. By moving I am paying about £100pcm more on rental than I am earning from renting my house out, so the difference there to me is only £100pcm, The problem is the rent I get from my own house means I am now technically earning and extra £6.5k a year (even though it goes straight into renting my current accomodation), which also puts pay to any chance of tax credits so not only am I £100pcm down, but there is now no chance of tax credits, even though I am not really earning enough to get by, so it leaves me teetering on the edge in order to keep the business running. Awkward, but necessary.

I'll get there, just like I say, I want to make sure I have thoroughly checked out all options.