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bigduckontax
bigduckontax, Accountant
Category: Tax
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I own a cottage which I let out as a Self catering holiday

Customer Question

I own a cottage which I let out as a Self catering holiday cottage. I run this as a business from my own home and we do not use the cottage personally. Onself assessment do I fill in the pages property income less expenses relevent to the cottage but where do I fill my office expenses from my own home . Can I somewhere take a proportion o my own home running costs to the business suc as repairs & insurance
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to be able to assist you with your question. You can use a room in your house as an office. There is a new allowance available as follows [source TaxAid]: 'An alternative basis, available from 2013-14 onwards, is to claim a flat rate deduction:£10 a month for 25 hours to 50 hours working from home£18 a month for over 50 to 100 hours£26 a month for over 100 hours' It's a nice rough and ready twist of the spoon to stop the treacle running off so to speak. Just maintain records and add the allowance generated to the expenses set against rentals. The same approach is appropriate for consumables you use in your home office. I do hope my reply has been of use to you.
Customer: replied 1 year ago.
can I take say 1/6th. of all my own house expenses say incl. computer and put this in box 24 ?
Expert:  bigduckontax replied 1 year ago.
Well you could, but you would have to be ready to support it. In earlier times one might apportion costs by floor area, but the new allowance has been introduced to make everyone's book keeping easier. Computer usage is perfectly acceptable.
Customer: replied 1 year ago.
is property expenses the correct box to put in my business expenses re my office as well allowable expenses regarding the cottage itself
Expert:  bigduckontax replied 1 year ago.
Well the answer is as long as the proverbial piece of string. From the tenor of your question I gathered that the use of the room was to service the holiday letting business only. If, however, you have other business use than you should not be offsetting against the holiday rentals, but using the business expenses boxes instead.
Customer: replied 1 year ago.
ok other business makes a loss property rental makes a profit. loss is fairly substantial so do set this loss against property profit or do I say property is main business using all office expenses and cottage expenses and forget about other business loss
Expert:  bigduckontax replied 1 year ago.
Property rental losses can only be carried forward, not offset against other income. There is, however, an exception for furnished holiday rentals providing the following conditions apply:
'A rental loss may qualify for immediate tax relief against any other type of income if it qualifies as furnished holiday lettings. To qualify, the property must be:
in the UK, and
available for holiday letting to the public on a commercial basis for 140 days or more, and
let commercially for 70 days or more, and
let for periods of longer-term occupation (more than 31 consecutive days) for not more than 155 days during the year.' [source: Small business and tax blog]
You can offset losses on other businesses against the profits from you holiday letting activities.
Customer: replied 1 year ago.
OK- Amway business makes a big loss due to 1/6th. of all house expenses set against a small income. Big profit on property rentals for holidays under deduction of Amway loss equals good taxable profit overall
Expert:  bigduckontax replied 1 year ago.
Right, so overall there will be some income to be subject to tax.
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Category: Tax
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Customer: replied 1 year ago.
do I keep running the two businesses one under self employment and one under property. seems like Amway run to reduce overall net profit ? what will tax man think
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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