To be able to qualify your letting business as a furnished holiday let, you must meet the following criteria:
The property must:
- Be available to let for 210 days a year
- Be actually let for 105 days a year
Revenue expenses
- Repairs & maintenance
- Cleaning
- Gardening
- Letting agency fees
- Advertising
- Business rates
- Insurance
- Utility bills
- Mortgage interest (no restriction for higher rate taxpayers)
- Professional fees
- Travel expenses
Capital allowances
You can claim 100% capital allowances on
- Furniture (beds, sofas, tables etc)
- Kitchen equipment (dishwasher, washing machine, oven etc)
- Other equipment such as televisions, vacuum cleaners, lawnmowers etc
- Installation of heating, water or electrical systems
- Replacement of like-for-like bathroom fittings would be a repair
- Replacement of like-for-like kitchen units, worktops, sink etc would be a repair
Commencement of the business
- When considering eligibility, look at the first 12 months
- The cost of the property is capital not revenue
- The cost of alterations to the fabric of the property are capital not revenue
- If the property was capable of being let when purchased, then initial costs for decorating and repairs are allowed as a revenue deduction
Private use
- A proportion of expenses and capital allowances should be disallowed where there is private use of the property, e.g. it is occupied by the owners
- There is no requirement to time-apportion expenditure simply because the property is not let due to lack of customers
For more information, contact Kathryn Greenwood on 07754 306943 or email kathryn@greenwoodtax.co.uk.
