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Documents for Business
In excess of 1,000 customisable documents covering every conceivable business issue.Introduction to this document
Licence agreement
Where your company makes a payment to you in return for being allowed to use your home or other property for its business, you should draw up an agreement to formalise the arrangement. A licence agreement, rather than a lease, provides your business with non-exclusive rights over the chosen part of your home.
Use an agreement
If your company uses part of your home, e.g. for you to work from or to store stock, you can charge it rent. As long as the property is used by the company for its business, it can deduct from its profits the rent paid to you. You will be liable to pay tax on this income net of expenses so it will need to be included on your tax return.
It’s sensible to set the rent at a level that at least covers your costs, but not much more than this. The arrangement should be formalised by an agreement which gives the company rights to use your property, but not rights over ownership. This is called a Licence Agreement.
