Claiming Rent for contract work..

mik_da_man

Hi,
I have started a company doing IT Consulting and it involves working on contracts across Ireland and UK.
I know if I am on a short term contract and staying in a hotel I can claim that as a business expense, but what i rent a room / apt for a short term?

This would not be my main residence as I still have a different home address.
and I would be renting soely for the purpouse of my business as it would not be feasiable to travel fom home to wherever I am working every day.

I have heard conflicting reprts on it and am seeking some more advice

Cheers

Mik

ircoha

A couple of things occur.

If the revenue regard the rented place as your place of work, then mileage between home and there cannot be claimed so you would want to make sure that no work was carried out there and dont show the address on any client papers/invoices etc.

My opinion is that as long as you have all the paperwork, it should not be a problem as there are agreed subsistance rates on the revenue website, they change annually, so if the rental costs are not much more than the subsistance rates then you should be okay.

Keep a record of mileage in your diary so if they ever as you can show that you were not charging the mileage to/from home on a daily basis and staying in the apt.
HTH

mik_da_man

Cheers for that - I must check the rates.
Also in regards Milage as you said I can't claim to and from work.
But I have to tavel back to my home address for meetings and sorting out company stuff a couple of times a month I presume I can claim milage for these trips?

Thanks I'm kinda new to this and don't want to be over, or more importantly under claiming my expenses


Mik

information

It should be fine paying rent rather than hotel bills.

You cannot claim for more than 6 months and you have to apply for the rate
if the time is more than 8 weeks.

You also cannot claim for weekends, so you would have to reduce the rent
by the number of weekends.

If you where to travel back home, you could claim the milage, but you would
probably not be able to claim the substance then.

ircoha

information wrote:

It should be fine paying rent rather than hotel bills.

You cannot claim for more than 6 months and you have to apply for the rate
if the time is more than 8 weeks.where is this coming from?

You also cannot claim for weekends, so you would have to reduce the rent
by the number of weekends.
dont know if I agree with this: the product is only available by the month, bit like saying I cant claim my PI insurance for weekends

If you where to travel back home, you could claim the milage, but you would
probably not be able to claim the substance then.

Look at revenue.ie

mik_da_man

information wrote:

You cannot claim for more than 6 months and you have to apply for the rate
if the time is more than 8 weeks.

You also cannot claim for weekends, so you would have to reduce the rent
by the number of weekends.

Do you have any more details on this please?
I want to get my facts right before I start writing myself cheques
My accountant is also checking for me

Bren1609

Is it "Wholly and exclusively for the purpose of the business"?

robbie checker

If he is staying over night, would that not be a benefit in kind to the director?
I agree that the rent is allowable as a company expense, but if the director is living there, he is also getting some benefit personally.

information

ircoha wrote:

where is this coming from?

Look at revenue.ie

mik_da_man

Bren1609 wrote:

Is it "Wholly and exclusively for the purpose of the business"?

Yep it sure is

ircoha

information wrote:

Look at revenue.ie

I was hoping u would have posted the exact link for the OP's benefit. the revenue site can be daunting.

If he is staying over night, would that not be a benefit in kind to the director?
I agree that the rent is allowable as a company expense, but if the director is living there, he is also getting some benefit personally.

What the OP has in mind is 100% driven by the business so if ur theory is correct, how does it differ from staying in a hotel.

robbie checker

ircoha wrote:

I was hoping u would have posted the exact link for the OP's benefit. the revenue site can be daunting.



What the OP has in mind is 100% driven by the business so if ur theory is correct, how does it differ from staying in a hotel.

I just think that if an audit was to occur, renting an apartment which is basically "accomadation", no matter how you dress it up and if he is living there while also using it as an office, this is a benefit in kind and under S118 TCA 97 "where accomadation is rented, at a market rent, by an employer for an employee, the taxable benefit for Paye and Prsi purposes is the actual amount of rent paid less any amount which the employee is required to make good and actually makes good to the employer in respect of the accomadation."

I think he would be safer to stay in hotels/bed & breakfasts and claim the receipts as valid expenses.

Bren1609

mik_da_man wrote:

Yep it sure is

Well then it's allowable. Thats the general rule of thumb "Wholly and exclusively for the purpose of the business"

In the unlikely event u get a revenue audit thats all u need to remember.

information

mik_da_man wrote:

Do you have any more details on this please?
I want to get my facts right before I start writing myself cheques
My accountant is also checking for me

http://www.revenue.ie/leaflets/it54.pdf

They seem to allow weekends when your in the same place.
I was away for 4 weeks in 4 different places, one each week mon-fri, but
the same trip and they didn't allow the weekends in between.

mik_da_man

Thanks for that.

Just to clarify - I will not be doing any business in the Apt. It is where I will stay for the duration of my contract.
I choose to rent short term because it is cheaper than getting a B&B of Hotel
Also I have a permanent address which is where all my company docs are addressed to.

It's a tricky one as my contract is a couple of months which makes it too expensive for hotels but it is too far for commuting on a daily basis.
I reckon I am ending up paying more tax this way as I could claim more from hotels - but I don't want to go down that road.

Mik