Corporate rent

We have a client who runs a consultancy through a limited company and – like many other directors we suspect – the business is run from home and much of the administrative and communication work is carried out from the house.

However in our particular case the sole director lives at home with his parents and wants to pay his father some rent through the company under the ‘rent a room’ scheme. Is this possible and if not can the same effect be achieved by an alternative method?

For example what if our client pays his father rent under the rent-a-room scheme and charges the company a proportion to reflect the company’s use of the property heat light etc? Readers’ advice is welcomed.

Query 18 018 – Lodger

Reply from Socrates

HMRC do not like the situation where the...