Can I claim tax relief for paying utility bills?
by Lou Valdini
9:04 AM, 28th August 2014, 12 years ago
7
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I can’t find if this has been asked before.
If I agree to let a property where the rent includes the utility bills, are those bills an allowable expense for tax purposes?
Thanks
Lou Valdini
7 comments on this article
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Member Since January 2011 - Comments: 12255 - Articles: 1477
9:05 AM, 28th August 2014, About 12 years ago
Hi Lou
Yes you can 🙂
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Member Since October 2013 - Comments: 1739 - Articles: 3
10:18 AM, 28th August 2014, About 12 years ago
Thanks Mark. I wish all property answers were that simple!
Member Since January 2011 - Comments: 12255 - Articles: 1477
12:04 PM, 28th August 2014, About 12 years ago
Reply to the comment left by “Lou Valdini” at “28/08/2014 – 10:18“:
LOL – I wish all the questions and issues we face as landlords were this simple too! 🙂
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Member Since July 2013 - Comments: 562
12:40 PM, 28th August 2014, About 12 years ago
But do you have to detect them from the rent before working out the 10% “wear and tear” relief for furnished properties?
Member Since January 2011 - Comments: 12255 - Articles: 1477
12:44 PM, 28th August 2014, About 12 years ago
Reply to the comment left by “Ian Ringrose” at “28/08/2014 – 12:40“:
Yes I believe so, if in doubt check with an accountant, here’s a link to the Property118 member profile of mine >>> https://www.property118.com/member/?id=452
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Member Since July 2013 - Comments: 463
1:01 PM, 28th August 2014, About 12 years ago
Reply to the comment left by “Ian Ringrose” at “28/08/2014 – 12:40“:
I wouldn’t have thought so: how can gas and electricity bills count as “wear and tear” on furnished property? The 10% allowance is meant to compensate landlords with furnished property for the cost of replacing worn-out furniture etc from time to time.
The utility bills are a business cost, so if you are paying them and being compensated by the tenant alongside their rent, you should be able to claim a deduction. I ask my tenants to make separate rent and utility payments, and ignore the utility income and costs in my accounts as they always cancel each other out.
Member Since July 2013 - Comments: 66
2:48 PM, 28th August 2014, About 12 years ago
The Inland Revenue Web site will supply you with the answers. As I use it in your circumstances, utilities used exclusively for the business are a deductible expense. If you claim wear and tear for furnished residential accommodation I think it says that it will be net of your utility costs. If you operate a service charge the role of that charge in the above calculation is beyond my understanding. If you charge for services it could be complex and require experienced guidance.