Can I Claim Rental Costs as Expenses

Hi Experts,

I started contracting recently. I live in the North of England, renting from my parents and work in London. I am renting in London and stay there whilst working.

I was informed by my umbrella company that I can claim my secondary accommodation in London as an expense. After joining them and submitting my expenses, they have now rejected it with the reason that I am not allowed to rent my primary accommodation from my parents.

Can you give me any information on this and if it is a rule or just their rule?

Thanks

Jason

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Hi Jason

There is a distinction between a person who maintains both a family home and, in addition, incurs the expense of accomodation whilst working away from home and a person who lives with parents and pays a "rent".

I don't know exactly what you mean by "rent" - are you paying a full commercial rent to your parents and, in addition, renting the accomodation in London? Accomodation on its own is not an expense of travelling as it meets the need for shelter, however, if you are maintaining a home and have to work away on a temporary contract then, as long as the travel expense is allowable, the overnight subsistence will qualify in that you are maintining two homes.

If you do not pass the test of maintaining an existing home you will not be able to claim the cost of the accomodation at the workplace. I would imagine that the umbrella company is of the opinion that the claim is, at best, doubtful.

See our guide to umbrella company expenses.

Bob Jones

Independent Expenses Expert

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Hi Bob,

Thanks for your reply.

My parents own a small building company which built some houses and are now renting them out. I rent one of these houses as my primary accomodation.

I have a 6 month contract in London so I am also renting short-term there.

Is it legislation that you are not allowed to rent from family as this is what they have told me?

Thanks

Jason

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Hi Jason

I have assumed that you are not living with parents. If you are living with parents and paying a "rent" then that is the address at which you are living. It might be what you call home but there is an argument that is not your home

If you then take up rented accomodation in London the umbrella company may be of the opinion that this is now your home - and it is important to establish what is "home".

A true example that was referred to me was that of a person who was working away from home and staying in digs - and travel to digs was allowable. Unfortunately (or perhaps fortunately) he then fell in love with the landlady and, even though he still went on occasions to what had been his home for visits, the claim for travel was refused as this was no longer his home.

On the assumption that the property which you rent from your parents is truly your home I don't see a problem.

Bob Jones