10% wear and tear loss affect on furnished?

by Readers Question

8:45 AM, 4th August 2015
About 4 years ago

10% wear and tear loss affect on furnished?

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10% wear and tear loss affect on furnished?

There has been a lot of talk about this allowance being fair game for removal and at first I thought the same. When I read the IR consultation document I suddenly realised some serious consequences and why the allowance had probably been given in the first place. I have written to HMRC as part of their consultation process (link below) as first posted by Mark – thank you.furnished

if rental values for furnished and unfurnished properties is about the same, as it is here in London, then it makes no financial sense to let furnished. Why incur the additional outlay plus time and effort to purchase and the responsibility to maintain, insure and replace. I have 10 places in London and have about £50,000 tied up in furnishings and over the course of a year, spent a fair amount of my time fixing and sourcing white goods and furniture plus disposing of old items. For this I currently receive a tax break of about £6,000 that makes it worth my while. Much less than this and it would not be, loose it all together and I’d be mad to continue renting fully furnished.

So, would the market then compensate by attracting higher rents? In London, It is mostly young professionals who do not have the means or job stability to warrant having their own furniture that want to rent furnished places. I think what we would quite likely see over time is a substantial drop in the amount of furnished property on the market thereby making it harder for this dynamic section of the work force to be dynamic!

As with all changes, there is always a price, I wonder if this one has been thought through?

What do other people think?

Jamie

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447461/150715_Wear_and_tear_condoc.pdf



Comments

Michael Barnes

8:41 AM, 11th August 2015
About 4 years ago

Reply to the comment left by "David Mensah" at "10/08/2015 - 18:42":

The referenced article is out of date.

From 2013-14 tax year Renewals basis is unavailable, only W&T.

Linda Price

22:46 PM, 1st September 2015
About 4 years ago

Actually, as my rents are quite low on a lot of smaller units, I've always found the 10% just about covers my outgoings and some years its not even covered the outlay. Maybe HMRC wont get quite as much back out of this as they'd hoped?

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