therapy rooms

[dawn123]

The kids are getting older now and I'm bored just doing the books of our butchery business. We rent out the (very nice) flat above the butchers, but we're having difficulty letting it at the moment. So....

I've decided to set up my counselling practice up there

My question is: We want £400 rental for the flat as a resendential dwelling. Can my new practice pay this to my husband's limited company? This would be a bona fide transaction. But here's where it might get complicated....

I am unlikely, at first, to be making enough to cover that cost so, the money will be coming out of a (would be dwindling) amount that I have set aside to cover set up costs. Of course, this would then mean that I would be making a loss for a while until the clients came and I could break even.

I imagine that this is tax avoidance, which I don't have a problem with at all as long as it's technically legal. (please, no moralists)...

But is it doable or even worth it? Or should I just 'give' my practice 6 months rent free? I already earn up to the basic threshold via the limited company, so any profit I make, I assume would be taxed at basic rate. Blurghhh

By the way my husband has insisted that he does actually want the 400pcm, so there's no dodginess on that score. He has also said he will turf me out if a prospective tenant comes along and I'm not coughing up the full whack

Advice anyone??

 

By the way my husband has insisted that he does actually want the 400pcm, so there's no dodginess on that score. He has also said he will turf me out if a prospective tenant comes along and I'm not coughing up the full whack

Advice anyone??

Yes I think your husband should be your first client.WTF

Earl

 

[Alex@Iansprint]

As to whether the business will be a success, very much depends upon the location, the demographic of your clientelle etc.

You're fortunate in that your overheads and pressures etc may be lower than somebody who wants to go it alone, and therefore you may be able to make it very successful.

I'd say, if you have the drive, go for it!

 

[dawn123]

I know, innit

 

[dawn123]

It's certainly doable, yes.

I was more wondering about the accountancy perspective though. Paying money to one's own business, y'know.

 

[Bri]

Yes I think your husband should be your first client.WTF

My thoughts exactly Earl when I read it. Git!!!

Get in there and hold back the rent until he can get the smell of the butchers block away, which is upsetting your clients, especially the phsycopath and the vegetarian.

 

[dawn123]

haha.

Does anyone want to actually answer my question ABOUT MAKING A LOSS ON MY END OF YEAR ACCOUNTS AND POSSIBLY GETTING A TAX REBATE?????????????????

grrrrrrr

 

[Bri]

Okay, not sure about a rebate but your P&L will show that fact, in most businesses as you know, year 1 is virtuallly tax free( I say that with my tongue in my cheek) and your P&L should show increases over yrs 2 & 3 which would set aside your start up costs from yr 1.

IMHO you should firstly have a quiet chat with your hubby though, any savings you can make on your operating costs in yr 1 will bode well for the future, and rent free or lower rent and any increase towards the 400.00 pm based on turnover in yr 2 then capped at that. By the way is that all inclusive the 400 pm?

 

[dawn123]

Thanks that's great.

I'm only jesting about my husband, i'ts just that it makes sense if we can get the full 400 from a tenant I could perhaps move my practice to our house (difficult though as I have noisy children)

But I still haven't got an answer to my question: Can I pay rent to my husband's business? Is it kosher??????

 

[wizzard]

I'm not an expert, but as long as your husbands business owns the flat, I don't see it being a problem, get your husband to raise an invoice for the rent.

Gets ready for a slapped wrist

 

[oldeagleeye]

If your husband is trading as a limited company. No problem. If not the question will be is the rent reasonable and market value. £400 seems cheap to me but I am in the south east where a room in a bedit can cost £100 quid a week.

That you have rented before at £400 a month seems to me then the deciding factor. When you actully pay the rent is irrelevant so if hubby don't mine waiting don't pay for 6 months just write it down as a 'book' rent in your year end P & L account.

BTW. If you got dogs at home. Don't leave any big bone marrow bones sticking out of a carrier bag in the consulting room if you have a punter with a nervous disposition - and if your hubby should look like Jack Nickcolson tell him no jokes like knocking on the door with meat clever in hand saying 'honey I'm home'

rob

 

[GGGSurrey]

But I still haven't got an answer to my question: Can I pay rent to my husband's business? Is it kosher??????

I've no idea if your husband's butchers is kosher.........

Yes you can pay rent to your husband's business. Whilst it has to be at a commercial rate that isn't necessarily £400. You could quite easily argue that it hasn't been lettable at £400, you have a shorter notice period, etc. etc. and therefore the rent might reasonably be less. That's from a company/tax point of view.

 

[oldeagleeye]

I gave you the answer YES. You might need to apply for a changeof use though. Personally. I would just keep quiet

 

[elaine@cheapaccounting]

Who wons the flat? Is it owned by your husbands limnited company?