# write off rented apartment cost as a business expense



## bubbashakes (18 Aug 2011)

Hi experts

I'm going to be moving from Cork to Dublin to take on some project work for ~ 6 months. I'm a consultant and all of this work is paid to my limited company. I can then pay myself a salary from this. To keep costs down, I am looking at renting an apartment as opposed to staying in hotels or B&Bs 5 nights  week. 
In terms of writing off the cost of the apartment as a legitimate business expense, is there anything i need to do, or to be worried about? Also, will utility costs also be deductible as expenses? 

My primary residence in Cork will be unoccupied, and I will continue to pay my private mortgage on that property during my stay in Dublin

Thanks in advance for your advice


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## capnhand (19 Aug 2011)

Hi

I think this similar question was asked over in the taxes forum a few days ago.

Its not allowed as a business expense as it is essentially shortening the commute for you when the business is temporarily based in Dublin and you are living in Cork.

Hope this helps

capnhand


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## bubbashakes (19 Aug 2011)

Hi Capnhand

Thanks for the reply. It's unfortunate if that is the case. But if I were to stay in B&Bs or hotels, these are legitimate business expenses, which also shorten my commute. 

To be honest, my goal is to save money (or not spend money I do not have  ) and hence the cost of a rented apartment at 500 or 600 per month is more appealing than 2000 in hotel expenses. 

Is there a way I could at least write off some of the cost, or is it simply a  no-no?


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## capnhand (19 Aug 2011)

bubbashakes said:


> It's unfortunate if that is the case. But if I were to stay in B&Bs or hotels, these are legitimate business expenses, which also shorten my commute.



No they are not a legitimate business expense.

Your base of operation is going to be your customer's premises in Dublin. And the work you do will presumably for the most part also be carried out there.

The only way such expenses are allowable is if the actual work is away from the base of operations.

In your case the job is actually at the base of operations so these expenses are not allowable.

When you think about it, you would otherwise be getting an unfair advantage over a similar person who lives and works in Dublin. They are not entitled to a deduction for their private accomodation so why would you be?

Kind Regards

capnhand


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## Joe_90 (19 Aug 2011)

Op is you base in cork?  If so you should be entitled to civil service subsistence rates.
It is always important to establish where you were engaged to work.  Check revenue.ie for IT54.


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## mandelbrot (20 Aug 2011)

Joe_90 said:


> Op is you base in cork?  If so you should be entitled to civil service subsistence rates.
> It is always important to establish where you were engaged to work.  Check revenue.ie for IT54.



No chance that's going to fly in the case outlined by the OP.


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## hastalavista (20 Aug 2011)

http://www.revenue.ie/en/tax/it/leaflets/it54.pdf

IT 54 will work IMO, at the very least you could ask ur Revenue office.

The test is  where is the _normal_ place of operation , this is NOT the customer office in Dublin.

Afrer all he could always commute!

It is important to differentiate between tax free expenses claimed by the employee and tax deductible expenses incurred by the company


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## mandelbrot (21 Aug 2011)

hastalavista said:


> http://www.revenue.ie/en/tax/it/leaflets/it54.pdf
> 
> IT 54 will work IMO, at the very least you could ask ur Revenue office.
> 
> ...



The OP's case will not pass the test, as normal place of business for the duration of the 6-month contract, will be the location that the contract is to be performed. Note the requirement that substantive duties be performed at the employers premises, which will not be the case based on the info provided.


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## bullworth (21 Aug 2011)

capnhand said:


> When you think about it, you would otherwise be getting an unfair advantage over a similar person who lives and works in Dublin. They are not entitled to a deduction for their private accomodation so why would you be?



Isn't the flaw in that argument the fact that the OP is maintaining an empty private residence back in Cork therefore there would be no advantage  and in fact a disadvantage even if a proportion was claimed back in tax ?


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## bubbashakes (21 Aug 2011)

Hi guys

Thanks very much to all of you for the information. My situation is that this project requires a certain amount of hands on time at the customer site, but a considerable amount of off-site R&D - which will be done from Cork. 

I was trying to go the route of renting a small apartment vs. commuting + hotels/B*Bs as the apartment was turning out about 35% cheaper. Does the fact that my primary place of work is split (likely 50:50 or very close) mean that I can leverage IT54?

Thanks in advance


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## mandelbrot (21 Aug 2011)

bubbashakes said:


> Hi guys
> 
> Thanks very much to all of you for the information. My situation is that this project requires a certain amount of hands on time at the customer site, but a considerable amount of off-site R&D - which will be done from Cork.
> 
> ...



Now it starts to get interesting...!

OK, assuming that you are in fact carrying out a substantive amount of work at your company's base of operations, and your normal place of work continues to be Cork, then you may have a valid claim to T&S expenses.

If the company rents the apartment and provides it for your use, it would give rise to a BIK issue which would render the whole exercise more costly.

The most tax efficient way I can think of doing things then would be for you to pay  for your accommodation in Dublin personally, whether you go for hotel /  B&B / apartment is irrelevant.

The company is then free to reimburse you tax free at a rate up to the relevant civil service rates. The company gets a deduction for this in full, and it is tax free in your hands.

All of the above presupposes that you have got a valid claim to T&S, which is something you should seek professional advice on, and if necessary get confirmation from the tax office (again, a tax advisor who knows the right Inspector to call in order to set out the facts properly, will have a better chance of getting this confirmation than you ringing a clerical officer on the main switch who doesn't understand anything beyond the most basic queries...).


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## sean.c (22 Aug 2011)

My accountant says Revenue has been clamping down on this area big-time recently.  I'd advise you to get proper professional advice.

Assuming you meet all the requirements of being based out of Cork, my personal opinion is that mileage and subsistance is the best way to go.  You get a fixed  sum, spend it frugally, and pocket the difference tax free.  

However, AFAIK you can't mix and match - it's either vouched expenses, or unvouched.  You can't get a subsistance allowance and then expense dinner too...

Lastly, it might be comforting to have someone at Revenue confirm something, but it's not worth the paper it's (not) written on.  They are not in the business of providing tax advice and they won't stand by any advice given if you are later found to be uncompliant (and they've gone to court saying that).


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