If you or any of your staff has to stay away from home for a prolonged period, the cost of hotel bills can soon add up. Why not rent a house or apartment, instead?

So long as the relocation of staff doesn’t last for more than two years (i.e. it’s ‘temporary’) then the rent paid for the house or apartment will be tax-deductible for your business and there will be no benefit in kind charge on the person using the property.

Personal expenses paid for the employee would, however, be taxable on them (e.g. newspapers, TV license, etc.). You can get around this by giving the person staying away from home a £5 per night expense allowance to cover ‘incidental personal expenses’ – they won’t be taxed on this. 

HMRC understands that the employee’s family may occasionally visit, so there’s no tax penalty for renting, say, a two-bedroom property as opposed to a one-bed. But the taxman will have something to say if it’s a disproportionally large mansion!

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David Elliott
David Elliott

Chartered Accountant, BSC, FCA

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