Question on Company

The question of whether you pay business or houseold rates for utilities seems to vary from region to region. It used to be the case that businesses paid higher electricity prices but nowadays  for reasons discussed previously, business rates for electricity are now lower. The company can grant a person, including a director, a tenancy on the property, which legally makes it domestic consumption of water and electricity, if that's favourable in your area (unlikely as things stand).

The company owning a vehicle doesn't count as "activity" but if you have long-term residency you can buy one in your own name anyway.

@JimJ Thanks Jim. We were going to wait for our residency card before we get a car so that sounds good.

Our electricity bills seem quite expensive and were thinking about taking a translator to check if  there was a problem with our bills. The last two months were 95 and 85 which, considering not using heating or air con seemed high unless it was the power tools.

@JimJ

Hi JimJ, sorry to jump into the thread, but I’m looking into the same issue and thought clarification might help others too. I’m getting conflicting advice and haven’t found a definitive source covering my circumstances.

I’m a British citizen living in the UK, considering buying a village house through a Bulgarian company solely for my own holidays, with no letting or other business activity.

When you mention granting the director a tenancy, must actual rent be paid to the company, or can an agreement allowing occupation without payment be accepted for domestic utility accounts?

Alternatively, if utilities remain in the company’s name, can I fund those bills personally without affecting its inactive status?

I’m also trying to establish whether using the company-owned house personally creates any tax liability, even if I pay all household bills myself.

Have you used either arrangement, or could you point me towards current guidance or an accountant familiar with this situation?

Many thanks.

@Neilgezad1

It seems to vary (as is so often the case here) according to the region (and maybe the phase of the moon 😎): some utility companies like to charge commercial rates on a company-owned property, even if it's just a private residence, but it's much of a muchness nowadays as domestic and commercial rates are very similar. Immigration seem to have had no problem accepting the Notary Act as proof of address, but other members probably have no up to date personal knowledge about that.

Paying property taxes/bills don't count as company activity, but if you buy a car through the company that does, as do taxing/insuring/"MOT"-ing a vehicle.  I've not heard of anyone falling foul of that but that doesn't mean no-one's been caught out by it, or won't be in the future.

From my own experience, the tenancy agreement where your property owning company gives you permission as a private individual to live in the house doesn't need to include any payment. All I needed was a notarized statement  that xxx company gave me permission to live in xxx property address.

But some places will want that, some places just want to see the notary paperwork for the property purchase.

@Neilgezad1

  It is possible, but check VAT before you buy. If the seller charges VAT on the sale, the company can use that VAT in its VAT return. If the company then does not use the house for any VAT-taxable activity (holiday use by you is not one), that VAT position becomes a problem, and Bulgarian VAT rules include an adjustment mechanism for real estate that can run for up to 20 years. So find out before signing whether the sale carries VAT. If it does, the structure needs to be planned around it. If the sale is without VAT, this issue does not arise.

If VAT is not a concern, the company can give you the right to use the house for free under a written agreement. You can show that agreement to the utility providers, and you can pay the bills, property taxes and other costs yourself. This matches what janemulberry says above about a notarised statement from the company.

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