天美影院

Summary

Rent-a-room is aimed at individuals who let furnished residential accommodation in their own homes. You should refuse claims that rent-a-room can apply where rooms in private homes are let as office accommodation.

We published our views on the suggestion that rent-a-room relief might be available for rooms let as offices etc. in TB12K of August 1994. The article is reproduced below.

Extract from TBK12

鈥淭here have been some suggestions in the professional press that relief could be available where a residence, or part of a residence, is used as an office or for other trade or business purposes (other than the business of providing furnished living accommodation) and sums are paid in respect of that use. We take the view that such claims are inadmissible since:

• the words of the legislation, in our opinion, do not permit such claims, and
• the legislation was never intended to give relief in such circumstances.

Where a room is used exclusively as an office or as other trade or business premises, it is no longer occupied or intended to be occupied as a separate residence - one of the conditions for rent-a-room relief. As such, it is no longer, for rent-a-room purposes, part of the 鈥榬esidence鈥� because F2A92/SCH10/PARA7 permits the identification of parts of buildings which are occupied or intended to be occupied as a residence.

Rent-a-room relief can only apply where 鈥榬elevant sums鈥� accrue in respect of the use of 鈥榝urnished accommodation鈥� in a 鈥榪ualifying residence鈥�. The Act does not define 鈥榓ccommodation鈥� which should therefore take its everyday meaning. The dictionary meaning of 鈥榓ccommodation鈥� is 鈥榣odgings鈥� or 鈥榓 place to live鈥� and in our opinion, the normal unqualified meaning of 鈥榓ccommodation鈥� is 鈥榣iving accommodation鈥�. Consequently, even if an entire residence, or part of a residence, is used as trade or business premises and payments are made in respect of that use, we take the view that rent-a-room relief will not be due. The payments will not have been made in respect of the use of living accommodation as such.

The Standing Committee debate in Parliament on rent-a-room indicates that the context in which rent-a-room was being considered was that of providing additional residential accommodation and not office or business accommodation. We do not think that the legislation is ambiguous or obscure. However, should Commissioners, for example, consider that it is, then following the decision in the case of Pepper v Hart[1992] 65TC421 it may be possible for them to refer to relevant Parliamentary material. This material supports our interpretation that lettings other than furnished residential lettings are excluded from rent-a-room relief.

The foregoing does not apply to genuine lodgers such as students who are provided with study facilities in their lodgings. In such cases, we would not want to deny relief where a lodger living in the home is provided with a desk, or the use of a room with a desk, which he or she uses for work or study鈥�.

Further Analysis

A residence, for rent-a-room purposes, is defined at F2A92/SCH10/PARA7 (for years up to 2004-05) and ITTOIA05/S787 (for 2005-06 onwards) to include not only entire buildings but also parts of buildings which are 鈥榦ccupied or intended to be occupied as a separate residence鈥� (see PIM4001). We think that this definition achieves two objects.

1) It defines the self contained entity within a larger building which can be regarded as a separate residence for rent-a-room. An example would be a single flat within a block.

2) Relevant to the 鈥榦ffice鈥� claim - it excludes from the self contained entity any part or parts which are not actually occupied or intended to be occupied as a residence.

It has been suggested that the second part of F2A92/SCH10/PARA7 (that is everything after 鈥榖ut鈥�) means that the fact that a let room is used as an office should be disregarded since that room is still part of a building that is a residence. We do not accept this interpretation. The relevant part of paragraph 7 says:

鈥渂ut a building, or part of a building, which is designed for permanent use as a single residence shall be treated as a single residence notwithstanding that it is temporarily divided into two or more parts which are occupied or intended to be occupied as separate residences鈥�.

We say this applies only where a single residence is divided into two or more parts, and

• the division is temporary,

and

• all the parts are occupied or intended to be occupied as residences.

Even where the division into two parts is temporary (this is a question of fact - see also PIM4004) the second part of paragraph 7 does not permit rent-a-room relief where the claimant鈥檚 residence is divided into residential and office accommodation. Even where a room (or rooms) in a residence is used partly for business and partly for residential purposes, we take the view that the legislation, taken as a whole, does not permit rent-a-room relief where payments are made for the use of office or business accommodation.

The wording in ITTOIA05/S787 is equivalent and the same arguments apply for 2005-06 onwards.

The intention of the legislation

We do not accept that the rent-a-room legislation is ambiguous or obscure in excluding office lettings. But if you are or may be faced with an argument that it is, you may be able to refer to relevant parliamentary material in support of our interpretation that office lettings are excluded. This follows the guidelines set out Pepper v Hart [1992] 65TC421. BAI can supply copies of the relevant Hansard extract and advise on the approach to be adopted. Please refer to the Appeals Manual for guidance on the use of Parliamentary material in appeal hearings, but on this topic submit the case to BAI rather than Cross Cutting Policy (advice on appeals) before using Hansard material in an appeal hearing.

Tribunal appeals

The admissibility of the debit for 鈥榬ent鈥� in the accounts of the 鈥榩ayer鈥� may also be vulnerable in these cases to a challenge under the 鈥榳holly and exclusively鈥� rule if it can be shown that the 鈥榓rrangements鈥� were fiscally motivated. You should contact BAI for detailed advice if a taxpayer appeals to the First-tier Tribunal.

Contacting BAI

Here is further information on how to make a (link is internal to HMRC).