Employer Renting a House for Employees Occasional Use

[sanfio]

I'm hoping someone can guide me...

My employer (we're a small start up business, I'm the sole Finance person, and although a qualified accountant, this level of 'responsibility' is new to me) wishes to rent a house that employees from out of area or visitors from out of area/country can stay in when they need to be in this office. His idea is that they (employees/visitors) would pay say £20 per night to stay in the house. Cheaper than hotel/b&b obviously, but is this allowable from a tax point of view, and how to account for from a tax point of view?

Thanks
sanfio

[Loza]

If the accommodation is not job related there is a benefit in kind to be entered on form P11D being the higher of the rent paid by the employer or the annual value (generally gross rateable value).
The employees contribution is deducted from this figure.
If the employer owns the accommodation the annual value is used up to £75,000 then an addition is made calculated as the excess over £75,000 multiplied by the official rate of interest
Time apportionment would apply for part lets.
Household bills paid by the employer are an additional benefit.
Furniture and equipment provided by the employer will generally be computed as 20% of market value when first made available.

[mullet]

I agree with all you say loza, but I think you missed a point in the question - it is for out of town employees and company visitors. Whether or not the accommodation is job related is not the point, and even if it was there would be an equivalent deduction under the employee travel rules.

The provision of a local property can be cheaper than arranging hotel accommodation, and more homely. For the provider, the only issue is whether the expense is incurred wholly and exclusively ... as long as there are no "freebie" stays for local employees and the occupation rate is healthy that would probably be satisfied.

Accounting - rent paid out would be like any other expense (debit exes credit bank). The £20 contributions would be the opposive, debit bank credit exes. Assuming that all users of the house were staying away from home (in the usual "staying in a hotel" sense) then they could be reimbursed the expense.

[Loza]

Mullett

I think I did miss that point, I had in mind longer periods of occupation than the odd night.

[sanfio]

Many thanks Loza and Mullet

[mullet]

Just need to clarify one point so that what I said makes sense - I missed a word.

Whether or not the accommodation is job related is not the point, and even if it was assessable there would be an equivalent deduction under the employee travel rules.

[Incredulum]

So the employer wants to charge his employees £20 for the privilege of undertaking what appears to be business travel for him? Assuming they're happy with this then the £20 is tax deductible for them.