Call for Assistance: 02033 259 341
Spondoo Accounting
Call for Assistance: 02033 259 341
Spondoo Accounting

CHARGE MY LIMITED COMPANY RENT FOR HOME OFFICE - FREE TENANCY AGREEMENT TEMPLATE

March 15, 2023

When working from home as a limited company director, you can claim working from home allowance under the rules of a normal employee. You can find these here;

Spondoo – Home Office LEASE AGREEMENT – individual to limited company (1)

However, as a director of a limited company it can be more tax efficient to setup an agreement with your company and charge a market rate for renting your home office out to your company.

Benefits of Charging your Limited Company Rent

Higher Corporation Tax Deduction – unlike the allowance for Self Employed individuals the working from home allowance calculation for employees does not allow you to include mortgage interest or rent you have paid personally on your home. This means the corporation tax deduction is comparatively low. Setting up an agreement with your limited company allows you to charge your company rent as a higher rate, thus lowering your corporation bill.

Lower National Insurance – charging your company rent allows you to extract a reasonable amount from your business without paying national insurance

Downsides of Charging your Limited Company Rent

Rental Income – unlike receiving money from your company under the working from home allowance, the rental income you received from your limited company becomes taxable rental property income and needs to be incorporated within your personal tax return. You can however calculate costs and expenses for providing this home office.

Capital Gains Tax – if you own and live in your main residential property, it is very likely you will be entitled to Private Residence Relief so you will be exempt from capital gains tax. When setting up a commercial tenancy agreement between you and your limited company you are essentially telling HMRC that part of your property is a commercial premises. This can impact your entitlement Private Residence Relief – you need professional advice on this.

Here you can download your Free Tenancy Agreement Template: Spondoo – Home Office LEASE AGREEMENT – individual to limited company.docx

Get in contact if you need proper advice from a qualified accountant – https://www.spondoo.co.uk/contact/

more tips

Can You Claim Food as a Business Expense?

The golden rule when claiming business expenses is that the cost must be “wholly and exclusively” for business purposes. So, where do you stand when it comes to food and drink? After all, everyone needs these things to survive. When does it become an allowable expense? Read on to find out when your business can claim food and drink as an expense.
READ MORE

Self-Employed National Insurance Class 2 and Class 4 Rates

If you are sixteen and over, self-employed (sole trader or in a partnership) and making a profit befitting the ‘small profits threshold’, you are liable to pay national insurance.
READ MORE

Key UK Personal Tax Year Dates & Deadlines 2021/2022

Are deadlines creeping up on you? Spondoo is here to ensure you keep on top of things and take control again. These are the important dates you should take note of.
READ MORE

How To Set Up A Limited Company 

A Step-by-Step Guide  This is an easy-to-understand, step-by-step guide, to opening a successful limited company. But before we dive in, let’s check the legality surrounding it. 
READ MORE

Accountants in Haslemere, Surrey

We are qualified accountants providing personal and professional services for start-ups, established companies and individuals in and around the Halsemere area in Surrey. With the rise in technology, we have embraced the digitisation of accounting using efficient digital accounting tools to offer reliable services to our customers. Our goal remains to get our clients the best accounting and taxation services at the most affordable rates.
READ MORE

Onsite Canteen and Lunch Vouchers - Are They Taxable?

The provision of food and drink to an employee by their employer is a lovely thing to do. Eventually, it promotes teamwork, loyalty, a sense of belonging and even improves productivity. Taking it at face value makes it look like a simple act of kindness. However, unless it is done correctly, it can cause tax and national insurance compliance issues for the employer.
READ MORE
1 2 3 40
LEARN MORE
Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
© Copyright 2023 - Spondoo - All Rights Reserved
How, can we help?
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram