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We have a building company client which has been working for some two years just outside London at a particular client's site. (There are no IR35 problems.) The managing director who lives in the north of England has rented a furnished flat for the last fourteen months in this region (at a cost of £1 500 per month) to avoid the inconvenience of constantly changing hotels (the region being in a tourist area). He and his men regularly work seven-day weeks at this site and his family has never been to the flat. He travels home when work permits for odd weekends and the other needs of his business. Certain of his men and consultants have stayed at the flat with him at various times. The flat was rented for no other reason than as a convenient base for work.

Advice would be greatly appreciated regarding the...