Company renting a flat for employee, any advantages or disadvantages?

[cl1971]

Hello there,

I'm looking for some advice related to expenses.

If a limited company is renting a flat for one of their employees to work and to live their (home office), can the rental payment be reduced from the revenues?
I know, in most cases, there is no VAT charged on rented properties so it can't be claimed back,but will there be any advantage for the company regarding the TAX ?
Or maybe any disadvantages?

Any advice is much appreciated.

Thank you
cl1971

 

[Mitchells Bristol]

Hello there

If the company rents a property for a staff member, then yes the rental cost will be deductible against profits for corporation tax purposes. However, unless in very specific circumstances, this will give rise to a taxable benefit in kind for the employee, with corresponding tax and NIC charges.

There will be no VAT issues if it is a residential property.