HMRC won a case re accommodation away from home as an expense for Actors

HMRC won a case re accommodation away from home as an expense for Actors

Tim Healey the actor was unsuccessful in claiming tax relief for renting a flat when working away from home. His admission that he wanted a spare room to accommodate potential guests meant that the expense was not “wholly and exclusively incurred” for the purpose of his business.

HMRC disallowed the rental cost on the basis that the rental term was for a year, maintaining that a taxpayer cannot obtain tax relief on rental accommodation because the costs of living are private costs.

Although the outcome is a huge disappointment for the taxpayer this case is highly significant for any self-employed taxpayers who stay away from home on business. These costs may well be allowable, but the will be decided on a case-by-case basis, according to their facts. The law sets no limit as to how long one can be away from home to obtain tax relief. It may be one night, or as in this case even nine months. Mr Healy’s admission that when choosing his accommodation, the consideration of choosing accommodation with the intention of having his guests to stay was the single factor that sealed his fate, but if he had chosen a flat with a single bedroom, the question of guests would not have arisen. Had he also retained receipts for his expenditure on subsistence, things might have gone in his favour.

Ask Red Tulips Accountants for advice before committing to any major expense.

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