Sole trader - Rent flat abroad while working there - considered buisness expense?

js8765

Hi,

I am planning on setting up as a sole trader. Most of the work I will be doing will take place in Spain so I will be there a little less than 6 months each year. I was planning on renting some accommodation there. Does anyone know if this could be considered a business expense?

Thanks in advance for any advice!

Gloomtastic!

According to http://www.revenue.ie/en/business/running/allowable-expenses.html#section2 you can claim rent as part of your business expenses, if it is where you run your business. However, it may also raise benefit in kind issues ie you are benefiting from free rent so you may be taxed more.

Speak to an accountant or two. You may get different answers from each one so be careful!!!

js8765

Thanks for the info Gloomtastic.

It's made me wonder now how do the revenue office define the difference between office and residence. Is it just a subjective assessment on their behalf or does anyone know if there are any hard and fast rules?

Gloomtastic!

js8765 wrote: »

It's made me wonder now how do the revenue office define the difference between office and residence. Is it just a subjective assessment on their behalf or does anyone know if there are any hard and fast rules?

The fact it's a home office makes me think it wouldn't be allowed - you can't claim it in Ireland, why would Spain be any different? You can claim a portion of the utilities - phone, air conditioning (as opposed to heating!), broadband etc.

But double check with an accountant or speak to Revenue. If they say you can claim, make sure you get it in writing!!!

AndyJB

js8765 wrote: »

Hi,

I am planning on setting up as a sole trader. Most of the work I will be doing will take place in Spain so I will be there a little less than 6 months each year. I was planning on renting some accommodation there. Does anyone know if this could be considered a business expense?

Thanks in advance for any advice!

Hi,
From my own experience in IT contracting, it's more tax efficient to trade as a limited company when working overseas. Have a chat with Contracting Plus about your options. Any accountant would probably do, but C+ are specialists in the whole contracting and overseas area.

Best of luck.
AJB

PS I'm not connected to C+ in case you're wondering.

dbran

Hi

This is a very complex area and is based entirely on the circumstances. A generic answer that you get on here will simply not be good enough.

The principle is that the decision on where a tax payer decides to work and where they decide to live are personal decisions and not business ones.

If the cost of the accommodation is incurred basically to shorten the commute then it is a personal expense and not allowable.

If the work is such that it must be carried out in Spain remotely from the customers place of business by necessity then it may be allowable.

Go and speak to an accountant.


dbran