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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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In my previous question to I detailed how caravan sites ask

Resolved Question:

In my previous question to I detailed how caravan sites ask for site fees of 2.7k payable around now and other normally allowable expenses like insurance, safety checks are also due and I also need to buy new bedding and claim 100% as a capital allowance.
You suggested starting my caravan sublet as a FHL starting on 6 April 2016. I could then claim all my outlay as 'pre-trade expenses and allowances' on that date and as I would be completeing my self assessment at the end of the 2016/7 tax year i will have
completed the 105 day letting requirement. However i will need to start my business before then. i will be advertising it from Dec 2015 and hope to take income in deposits and prepayment from Jan 2016. Even one week breaks booked in may 2016 will involve payment
coming in in tax year 15/16 as i will require settlement one month before. So I think I the business will officially start in Jan 2016.(?) So can I still claim my outlay as pre-trade expenses/allowaces in that tax year 15/16 when I will not have proved the
105 days of letting required until some time in 16/17. in fact will i be able to claim them at all? Is there any way round this?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
Pre-commencement expenses are treated as being incurred on the first day of actual trading so if that day is in the 2015/16 tax year, that is when the expenses will be treated as having been incurred, even for a furnished holiday let.
The letting requirement is initially based on a 12 month period from commencement so you claim them on the basis that you will meet the criteria.
Take a look at the notes here for more information:
https://www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2015
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
So if i just complete the FHL section in SA105 including the expenses and allowances HMRc will assume I will meet the 105 days? Is there anywhere on that form where they ask you about your intentions i.e,business plan or do they check up later?
Expert:  TonyTax replied 1 year ago.
HMRC can make enquiries into a tax resturn any time up to 12 months after it is submitted to them. Read the notes I gave you a link to as there are concessions to help you meet the criteria.
HMRC won't ask to see your business plan.
TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thank you.This has put my mind to rest. I am very confident of subletting for 105 days as the caravan is in a prime location