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taxadvisor.uk, Chartered Certified Accountant
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I need some advice about what expenditure I can claim

This answer was rated:

I need some advice about what expenditure I can claim against rental received for my new FHL for my next tax return.
JA: For which tax year do you need advice?
Customer: y/e April 2020
JA: Anything else you want the Accountant to know before I connect you?
Customer: Not sure what he/she will want to know?

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

There is a general guide issued by HMRC that covers allowable expenses. Look at HS222 here

https://www.gov.uk/government/publications/how-to-calculate-your-taxable-profits-hs222-self-assessment-helpsheet/hs222-how-to-calculate-your-taxable-profits-2020

Here are some examples of allowable expenses:

- Utility bills or refuse collection

- Interest on loans associated with the property

- Advertising or letting agency fees

- Products bought for the property (cleaning products and welcome packs)

- Maintenance and cleaning costs

Being a FHL, it would pay business rates but you can claim small business rate relief.

Here is a link to furnished holiday let tax guide. You will find it helpful.

https://www.sykescottages.co.uk/blog/furnished-holiday-let-tax-guide/

If you need further help, please come back to me here

My aim is to give you a professional service. I hope this is helpful and answers your question.

Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave JA today. If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Customer: replied 1 year ago.
Hi, thanks for this. I have read HS222 and I let the property through Sykes and have read all of their literature. Some things are clear but some things are fuzzy.
What I bought was a run down cottage that needed everything replaced internally before it could be let. So can I claim for things like re-wiring throughout electrics; new kitchen applicances; roof repairs (major!) and the list goes on. I don't want to claim for anything I am not supposed to but I don't want to miss out if I can. I've spent over £40K on the refurb!! Rental for this first year has been just under 7K. So additional question - depending on your answer to above - if I can claim for more than I have so far can I either put it against my other business which is on my tax return (nothing to do with FHL) or can I carry forward a loss onto next year of rental on this property.

Thank you for your reply.

I will revert to you shortly as I am busy with a client call.

Many thanks

Thank you for your reply.

Refurbishment expenditure is deemed expenditure on improving the propertyand would be available against the gain when you eventually sell the property.

You should not use this expense against income from other business. The normal rule is for an expense to be allowable, it has to be incurred wholly and exclusively for the purpose of the business.

Trading losses are available for offset against other income in the year. More information on losses relief is here

https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowance/what-if-i-make-loss

I hope this is helpful and answers your question.

taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Oh that is really helpful. Thank you very much. I now have more of a clue what I'm doing. It is just all so confusing. I'm good to go now I think so thanks again.

Thank you for your good words.

Best wishes.