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Where Taxpayers and Advisers Meet

Company Address

LMT8
Posts:8
Joined:Wed Aug 06, 2008 3:22 pm

Postby LMT8 » Fri May 20, 2005 6:14 am

Have recently set up a company which is currently being run from a room in my house. The company address is therefore my home address and all invoices will have this on them. Is there any way round this & what criteria will need to be met?

jamesconstantine
Posts:143
Joined:Wed Aug 06, 2008 3:15 pm

Postby jamesconstantine » Fri May 20, 2005 6:52 am

Is there a problem having the home address displayed on your company circulars? You may use a virtual office address or have the company's registered office elsewhere.

Other than the public's perceptions and misconceptions about the size of the company or quality of service if a company is run from home, I dont think it makes any difference to most people's eyes as long as the service you provide is of high quality.

Taxwise, make sure that the business is not carried on exclusively in a specific room as that might jeopardise your home's total exemption from CGT if and when you sell it.

Also, you may be able to claim a percentage of home running expenses against the company's income although you will have to declare that as income in your personal return.

Hope this helps.

James Constantine FCCA
http://www.taxadviceuk.com
FREE Weekly Tax Tips for the small business owner written in understandable language.
JamesConstantine, Chartered Certified Accountants
http://www.taxadviceuk.com

AA UK
Posts:270
Joined:Wed Aug 06, 2008 3:22 pm

Postby AA UK » Fri May 20, 2005 6:59 am

James raises an interesting concept. If the company obtains a licence from you (the houseowner) for nonexclusive use of part of the house and the company pays you 'rent' of say £4,000 a year can you report this as tax-free rent a room on your personal tax return so getting a deduction for money you pay to yourself?

Taxbar
Posts:1187
Joined:Wed Aug 06, 2008 2:19 pm

Postby Taxbar » Fri May 20, 2005 7:04 am

With due respect AA is just wrong on this one.

This has been the subject of previous lengthy post.
The rent a room scheme is not for Companies only, individuals and the Revenue will contest any claims of this sort and they will trigger a tax enquiry, so don't bother.

Daniel Feingold
STP
info@stratax.co.uk

deanshepherd
Posts:1019
Joined:Wed Aug 06, 2008 3:23 pm

Postby deanshepherd » Fri May 20, 2005 7:31 am

I agree with Taxbar.

If you wish to read the previous post discussing the matter it is here:

http://www.taxationweb.co.uk/forum/discuss.php?id=5987


Dean
dean@mmi-online.co.uk
www.mmi-online.co.uk

King_Maker
Posts:6538
Joined:Wed Aug 06, 2008 3:22 pm

Postby King_Maker » Fri May 20, 2005 10:52 am

I agree with Dean.

If you wish to challenge the IR's position on Rent A Room Relief for companies, be ready for a long fight.

AA UK
Posts:270
Joined:Wed Aug 06, 2008 3:22 pm

Postby AA UK » Fri May 20, 2005 1:25 pm

Thanks guys for the most learned debate.

The current HMRC material can be found here:

http://www.hmrc.gov.uk/manuals/pimmanua ... IM4002.htm

To my mind if the business is conducted on say a laptop in the dining room (shared with family) AND the business is a sole trade (or perhaps a partnership( then according to HMRC this should still work) because the accommodation is not being occupied by a company.

This is really a case where some case law would be helpful as against non-binding HMRC interpretations; but it was indeed refreshing and helpful to see the overall opinion.

jamesconstantine
Posts:143
Joined:Wed Aug 06, 2008 3:15 pm

Postby jamesconstantine » Sat May 21, 2005 1:13 am

You have my vote on this; at the end of the day a taxpayer should have the right to organise his affairs in such a way so as to pay minimum tax without breaking the law, beyond any (possibly arbirtrary and untested interpretations). I believe the taxman has an obligation to be clear and specific to avoid uncertainty in the business community.

James Constantine FCCA
http://www.taxadviceuk.com
JamesConstantine, Chartered Certified Accountants
http://www.taxadviceuk.com

BBC
Posts:3
Joined:Wed Aug 06, 2008 3:14 pm

Postby BBC » Sat May 21, 2005 5:31 am

You mentioned a virtual office address. How do I go about getting one? Will I need to notify Companies House of this? Are there any criterias I have to meet in order to get one?

Robert_I
Posts:51
Joined:Wed Aug 06, 2008 3:23 pm

Postby Robert_I » Mon May 23, 2005 5:35 am

La1man,

These are office people who provide an address for youa nd do telephone answering and mail forwarding. An example of one is

http://www.atlanticbusinesscentres.co.uk/

They provide mail forwarding for around £60 per month and call answering for £25.

Good if you want to look professional and not look as though you are a one man band.

robert@taxandfigures.com


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