Allowable expenses? – my first buy to let

by Readers Question

3 years ago

Allowable expenses? – my first buy to let

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Allowable expenses? – my first buy to let

I will be joining the team and collecting the keys to my first property at the end of this week, and getting it ready to let ….  yay! 🙂 Allowable expenses - my first buy to let

I have got most things in place, insurance/home emergency/legal and rent cover etc.

I am having trouble finding information out about allowable expenses though, when I get the keys I was planning on doing the following:

  • Changing all external locks and having 3 sets of keys made up
  • Changing the shower as it’s old
  • Installing a glass shower screen
  • Fitting all new light fixings, as only bulbs are left
  • Fitting blinds to most of the windows
  • Painting and cleaning etc

Am I right in believing these are all allowable expenses and I can claim the money back?

Who decides when things are to be replaced in the property?

I was thinking as I only have one property, is it easy enough to do my own self assessment tax return and claim all my expenses or do you think it’s to hard and an accountant could save me a lot more money?

I’m new to all of this, so any help would be gladly received.

Thanks

Rich



Comments

Mark Alexander

3 years ago

Hi Rich

Welcome to the world of being a BTL landlord, there is a lot of information here to get you started and to enable you to learn from other peoples experiences instead of the more costly alternative of learning from your own mistakes.

The items you have listed can all be offset against your rental income to reduce your tax. There will doubtless be others too.

Please have a look at this link to read about some of the common mistakes made by landlords when filing their own tax returns >>> http://www.property118.com/landlords-tax-returns-10-common-mistakes/61630/

May I also suggest you read this series of articles >>> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/
.

Jireh Homes

3 years ago

May I recommend investing in one of the following books (the cost of which may also be offset as an expense):

Carl Bayley "How to Save Property Tax"
Arthur Weller & Amir Siddiq "How to Avoid Landlord Taxes".

For a few BTL properties, Self Assessment Return is fairly straightforward, as you can make up a spreadsheet to track expenses.

Allan

Devon Mark

3 years ago

Hi Mark and Allan, thanks for the advice I will read up on the points you have made and look forward to learning the trade a bit more!

Cheers

Rich

Ray .

3 years ago

Hi Rich congrats 🙂 I am also a newbie to the site so I am more inclined to ask questions rather than offering useful help!

Out of curiosity will one set of the 3 keys be given to the freeholders and do you need to get written permission beforehand?

Also are you planning to take some time out before renting the place (i.e. to allow for painting, decorating etc) or diving straight in with letting out the property?

Devon Mark

3 years ago

Hi Ray,

Thanks, I've been advised that you give each tenant a set of keys and keep one set yourself. Yes I believe they sign for the keys and if they don't hand them back at the end of the term you can claim on the deposit for cost of changing locks.

Yes I'm going to get the place ready and looking as nice as I can before letting it out.

Rich

Colin Dines

3 years ago

Hi Rich

Regarding your accounting and tax return, I use a free package at smartpropertymanager.com to do my accounts, if you record all your income and expenses it can create statements of accounts, I use a monthly view and print it for my records, it can also create a form giving all the inputs needed for your tax return (handily showing which box to put them in).

There are a lot other reporting and reminders available too.

Cheers Colin

Michael Barnes

3 years ago

Reply to the comment left by "Rich " at "25/03/2015 - 13:21":

I would suggest more than 3 sets of keys.
a) you need always to have a set of keys.
b) you may need to let tradesmen have keys if you cannot be there when they do the work (but only if the property in untenanted unless tenant agrees)
c) If you let through an agent, then agent will need keys.
d) 1 set for each tenant.

I tend to have 5 sets of keys for each property.

I'm not sure if fitting blinds is deductable for tax purposes.
There is no longer a renewals allowance (other than 10% wear and tear allowance for furnished lets), and there never has been a capital allowance for the initial purchase of items in the property.
You can claim for maintenance and repair of the property and things in the property, but anything that an owner might take away when they move is not allowable (eg carpets, curtains, free-standing white goods; but built-in white goods are deductable when replaced)

Jireh Homes

3 years ago

Reply to the comment left by "Michael Barnes" at "01/04/2015 - 13:21":

There is a view that the initial cost of carpets, curtains, blinds, other soft furnishings and small electrical items are allowable as an expenses when first setting up a fully furnished property, with their renewal there-after not claimable as covered by the 10% Wear & tear Allowance. This may be viewed to extend to include larger electrical items (free standing white goods) and furniture, but does appear to be a grey area and views do differ.


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