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
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
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Clubrooms by No1 Lounges review: A luxury airport lounge for escaping the hustle and bustleMoneyWeek visits Clubrooms by No 1 Lounges, an airport lounge intended to elevate the pre-flight experience for passengers seeking privacy
-
26 million Brits at risk of retirement shortfall if state pension triple lock were to be scrappedCurrent projections of pensioner poverty assume the state pension triple lock will be in place for the next 50 years. Critics say this is unlikely and revised figures showing pension undersaving among millions more people give a truer picture of the crisis
