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.
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
