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01 September 2009
A management consultant who trades through a limited company has a hotel chain as a client. The customer allows the consultant to have free use of hotel rooms in London. Is there a benefit or a tax charge on this?
Our client supplies management consultancy and training services to a number of customers through a VAT-registered limited company.
He also provides consultancy to the management of a hotel chain and in exchange is allowed free accommodation for himself and his family when they are in London.
We need to advise on whether there are any taxation implications to this type of barter transaction and in particular would value advice on the following points.
- Is the company taxable on the value of accommodation provided to the director?
- If the company is taxable does a benefit in kind arise on the director?
- Alternatively is the individual taxable in a sole trader capacity on the value of accommodation supplied?
- In each case how is any benefit valued for tax purposes?
We should be grateful if Taxation readers can...
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