If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
Hi,
Bit confused about what I can and cannot claim for.
Have just completed my first year letting and thought I would be able to claim for furniture, soft furnishings etc for setting up the business. Is this correct? And what about if I have to replace these?
Have also been thinking of adding a porch to the property and wondered what allowances there are for building costs, labour and materials?
Many thanks
I asked the tax office and was told that replacement windows is Box 6 (Repairs) and replacement furniture is box 32 (Annual Investment Allowance) on SA105
I have looked over the HMRC website help pages and I am still confused.
My accountant has told me that I cannot claim for any of the cost of furnishings etc and that I will only get a 10% allowance on my income [/b]for the year. Also, the property is a new build and he has said I wont get anything for the build and the landscaping, paving etc.
And can anyone help with my other query? ...
"Have also been thinking of adding a porch to the property and wondered what allowances there are for building costs, labour and materials?"
Many, many thanks.
I don't think you get any allowances for improvements made to the fabric of the building so nothing for the porch I'm afraid.
The expectation would be that you would get the benefit of this when you sold the property.
I claimed my furnishing costs under capital expenditure and there are some integral features that you can claim for e.g. flooring/bathrooms/fitted kitchen.
An Acail wrote:My accountant has told me that I cannot claim for any of the cost of furnishings etc and that I will only get a 10% allowance on my income [/b]for the year.
The 10% wear and tear allowance (now being phased out I believe) is applicable to AST lets, not Furnished Holiday Lettings. Therefore it would appear that you haven't been able to comply with the FHL conditions of letting for more than 105 days, which starts from the date of your first letting.
If that's not the case, it sounds like your accountant knows nothing about FHL, in which case change accountants!
You should be able to claim most of your expenses in furnishing it too, one way or another.
Improvements are entirely different to equipping a property, and as others have said are not allowable.
Here's the link to FHL conditions, which should hopefully clarify things a little.
Our accountant didn't have a clue about FHLs to begin with - still not certain he does now TBH... I have to read up about it myself and then spoon feed him how I want to be taxed and see if he disagrees or not...
I got a lot of info from Tax Cafe and Colin Bayley's tax guides.
and his book (make sure you buy the 2015 version with updated rules from last budget where there were a lot of changes or check the site - got a feeling that one might be the kindle /digital version only.
