The letting of furnished holiday let accommodation is treated as a trade for most UK tax purposes, providing the property qualifies in accordance with the furnished holiday lettings rules. Because of this landlords with qualifying holiday let business are entitled to claim loss relief against other income together with capital allowances relief.
The main advantages of this is that furnished holiday lets are eligible for capital allowances relief which can be claimed with things such as furniture. If you have been running holiday lets for a long time, but have not claimed on stuff like furniture and fittings, you could qualify for a substantial tax refund thanks to money spent on furnishings and fittings.
Westbeach Properties wanted to include an expenditure list in order to help Holiday Let owners know what is allowable; please see the list below:-
• Rates and Insurance: insurance prices, water bills, business rates.
• Crockery and Linen: bedding, towels, pillows, cutlery, plates, dishes, pots and pans, utensils, etc.
• Electricity and Heating: Gas bill, electricity bill, fuel relating to holiday let or in proportion if attached to own residence.
• Repairs and Maintenance: non-capital items, general repairs (doors, tiles, etc.) painting and decorating and general maintenance.
• Advertisement: printing brochures and leaflets for advertisement reasons, stamps, postage, and stationary.
• Phone bills for the holiday let, also any charges to phone use to be declared as income.
• Using a place in your residence as an office (if significant enough). A proportion of home expenses including telephone bills can claimed.
• Marketing: Letting agent’s fees, plus any other marketing costs.
• Service provided with holiday let: caretaker, gardener, cleaners, and window cleaners. Be wary of PAYE implications. PAYE is a system used by HMRC to collect income Tax and National insurance from employment. You don’t need to register for this is none of your employees are paid £113 or more a week.
•Travel: you can claim 45p per mile. For journeys undertaken for management purposes only. You can also claim reasonable subsistence cost, for example hotel and food, when undertaking business journeys.
• Interest and finance charges: interest on loans taken out for purposes of improving or acquiring the property.
• Cleaning Materials and Consumables: bin liners, toilet rolls, soap, washing up liquid, sponges, etc.
• Sundry Expenses: welcome packs, TV license, internet, flowers, breakfast, refuse collection, window cleaning.
• All furniture, white goods and electrical equipment, flooring, ornaments, pictures, garden furniture and swimming pools (not the cost of the building in which they are housed).
Also, expenditure on the installation of kitchens, bathrooms, electrical systems, water and heating systems are included within capital allowances. Qualifying expenditure up to £250,000 can be claimed in full as a deduction from profits or can enhance a loss. 100% first year allowances are also available on certain energy saving equipment. If the expenditure is incurred exclusively for the purpose of the holiday let, then it is likely to be allowed for tax purposes one way or another. It is recommended that you keep a detail record of all expenditures.
Westbeach Properties welcomes any enquiries about holiday lets and we also offer free valuations. Please feel free to contact us at email@example.com or at 01273 911213. Our door is always open at Westbeach Properties, Victoria Terrace, Hove, BN3 2WB.