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My husband and I run a furnished holiday letting business

Customer Question

Hello, my husband and I run a furnished holiday letting business as an informal partnership. Where can I see the rules on whether he can be paid for the work he does and how we should split the profits/losses when filling in our tax returns?
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 help you with your question.
No, to an extent this sort of process can be fraught with difficulty and a Tom Tiddler's ground for argument with HMRC over the apportionment of rental income beyond the obvious 50/50 basis.
If you can show that proportionately he does more of the management of the lettings or vice versa then you may be able to use a different split basis, but be prepared for a battle with HMRC on the subject.
It would be better to at least put some sort of written agreement between the pair of you to support your individual positions.
I do hope that my reply has been of assistance.
Customer: replied 1 year ago.
Hello Keith, thanks for your answer.The first part of my question was based on whether my husband could be paid an additional amount for his maintenance work, as an expense of the business. This would be before we calculate the taxable profits.Sorry, as you say everything in this area seems very unclear!
Customer: replied 1 year ago.
Just to add a bit of detail, my husband has no other income whereas I have a permanent job. We have invested very heavily in the business such that its lossmaking at the moment (even before we consider paying him for the work he does). Hope that makes it clearer.
Expert:  bigduckontax replied 1 year ago.
I though that might be the case, that's what husbands are for, sorry for the non PC comment!
Yes, maintenance is indeed allowable against rental income before you strike the ba***** *****able for taxation and the partnership split. Just make sure that you have vouchers to support your position in the event of an inquiry or an investigation by HMRC.
Losses can be carried forward against future profits but not, unfortunately, set, in your case, against other income.
Customer: replied 1 year ago.
ok, thanks Keith, yes I know, those happy days when setting against other income was allowed are long gone. So just to be completely clear, the payment for maintenance can go to my husband even though he is an owner of the business? Sorry to keep checking but I need to make sure there is no ambiguity.
Expert:  bigduckontax replied 1 year ago.
Yes, it is a perfectly valid charge against the business. If you employed a handyman to do it that would be allowable and so is this. Just make sure that you have adequate supporting vouchers.
Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 1 year ago.
ok, many thanks Keith, that's now completely clear. You get my thanks and my thumbs up!
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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