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Posted Sun, 11 Jul 2021 07:38:25 GMT by Simon Newman
Hello I have a side business which is Flat rate VAT registered. It’s exclusively online retail and the issue I have is space for my stock. I am looking at options to expand and take on a unit / property in the most tax efficient way as possible I have a full time job, where my salary can afford to buy a property for this purpose. Would I be able to buy a property with my PAYE salary and rent it to myself for business storage purposes, and offset my tax liability on my self assessment?
Posted Mon, 12 Jul 2021 15:03:51 GMT by Simon Newman
Or would it make more sense to buy a unit through my sole trader business as a capital investment?
Posted Tue, 13 Jul 2021 10:13:16 GMT by HMRC Admin 10
Hi

Unfortunately it is not possible to rent something from yourself and claim this as a business expense.

If you rent somewhere that you do not own then this would potentially be an allowable expense. 

Thankyou.

Regards.
Posted Tue, 13 Jul 2021 10:20:02 GMT by Simon Newman
Hello Thanks for the reply What if I bought the property as a ltd company, and then rented it to my sole trader business?
Posted Thu, 15 Jul 2021 09:06:06 GMT by HMRC Admin 26
Hi,


You would need to speak to Corporation Tax to see if this would be allowed.

You may not be able to rent to yourself as a director of the company.

General guidance can be found here:

Business Income Manual


Thank you

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