Tax advice of the week: stay with friends on business trips

If you run a business and have employees yourself included who travel a fair bit, you may be looking for ways to cut down on hotel expenses, says Tax Tips & Advice. One option, provided you have friends in the right area, is to stay with them and pay them a small amount of cash. You can claim this as a business expense, while the cash can provide a tax-free perk to your friends or relatives.

The taxman considers a payment of up to £25 per night to be reasonable, but this is only a guideline, and if the arrangement is "put on a more formal basis", they could charge you a 'rent' for occupation of the room, which could be more than £25, but less than you would pay for a room in a local hotel. The 'rent' received by your friend would be tax-free under the rent-a-room scheme provided they received less than £4,250 in any tax year, but should be declared as property income on their tax return.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.