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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

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. 


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

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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