Tax advice of the week: stay with friends on business trips
If you run a business and have employees who travel a fair bit, stay with friends and claim it as a business expense.
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.
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