Rent a room scheme to your own company

noah1234

Hi Everyone,

I work from home. I have been reading online that you can charge your company rent for a part of your house that you are using. The answer is yes.

The Question Is: can I charge my company rent under the rent a room scheme?

The scheme allows tax free income up to £7500 per annum.

Thank you.

Comms69

noah1234 wrote: »

Hi Everyone,

I work from home. I have been reading online that you can charge your company rent for a part of your house that you are using. The answer is yes.

The Question Is: can I charge my company rent under the rent a room scheme?

The scheme allows tax free income up to £7500 per annum.

Thank you.

No.


And unless you're talking about the £204 tax relief (which you should claim) any rent would ofcourse be taxable income.

tacpot12

Answer is No.

See https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2017--2

LandyAndy

I claim 'use of home as office' for my company.

Electricity, Gas, Water, Sewerage, Council Tax, and Mortgage interest.

I charge the company 1/6th of these costs because I have six qualifying rooms in my house (kitchens and bathrooms are excluded). It would be 1/nth for a house with n qualifying rooms.


That is about £1400 a year for me so the company gets corporation tax relief at 19% = £266. May not be much but it is better than a poke in the eye.

It is offset against your Director's Current account so it saves you tax too.

I think that is the best you can do.

saajan_12

noah1234 wrote: »

Hi Everyone,

I work from home. I have been reading online that you can charge your company rent for a part of your house that you are using. The answer is yes.

The Question Is: can I charge my company rent under the rent a room scheme?

The scheme allows tax free income up to £7500 per annum.

Thank you.

No, the RAR scheme is for residential income, and not applicable if the room is to be used for business, which clearly a company would.

You should allocate a proportion of the costs to the company.. eg for bills / mortgage / your rent. You don't actually receive money from it, so you don't pay tax.

theartfullodger

Surely tax fiddling is unpatriotic, eh Noah?

noah1234

theartfullodger wrote: »

Surely tax fiddling is unpatriotic, eh Noah?

How is it fiddling when I asked for help to follow the law?
Is it patriotic to pay more tax than you have to legally? if you think so, then be patriotic youself and pay more and I will be patriotic and stick to the rules.

A big thank to everyone who answered my question. I really appreciate it.

00ec25

LandyAndy wrote: »

I claim 'use of home as office' for my company.

Electricity, Gas, Water, Sewerage, Council Tax, and Mortgage interest.

I charge the company 1/6th of these costs because I have six qualifying rooms in my house (kitchens and bathrooms are excluded). It would be 1/nth for a house with n qualifying rooms..

except you left off the time use adjustment: costs x 1/nth x % of time spent in the "work" room on business use.

if you don't do that , you will expose that part of the property to CGT (and, in reality hypothetically, also to business rates rather than council tax if you are unlucky enough to get spotted)