Furniture for lodgers as an expense?
Hello
I’ve read the article about “Capital v revenue expenditure on the first Refurb” , very informative.
If after moving in to my residential property I were to furnish an empty room for a lodger, would that be an allowable expense?
Likewise if I were to simply replace the old furniture in lodger bedroom, and re-decorate would that be an allowable expense?
Final Question – If I am not living at my home (working abroad), can I claim all bills as expenses? I imagine my accountant may have been only apportioning them while I was living there.
Thank you for any feedback!
Greatly appreciated
Rich
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Member Since February 2011 - Comments: 3453 - Articles: 286
11:26 AM, 10th July 2017, About 9 years ago
Hi Rich,
Under the .Gov rent a room scheme it gives you two options >> https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
“The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
You can let out as much of your home as you want.
How it works
The tax exemption is automatic if you earn less than the threshold. This means you don’t need to do anything.
You must complete a tax return if you earn more than the threshold. From 6 April 2016, this is £7,500. For the 2015 to 2016 tax year, the threshold was £4,250.
You can then opt into the scheme and claim your tax-free allowance. You do this on your tax return.
You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return.”
If you are not living in the property you can no longer automatically claim 10% repair costs, but have to record repair expenses that are replacements, but not additional capital expenses that are deducted from CGT rather than income tax.
Member Since February 2011 - Comments: 3453 - Articles: 286
11:29 AM, 10th July 2017, About 9 years ago
Also see example of when and when not to use the HMRC rent a room scheme >> https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2017
Member Since November 2013 - Comments: 1130 - Articles: 2
4:53 PM, 10th July 2017, About 9 years ago
Reply to the comment left by “Neil Patterson” at “10/07/2017 – 11:26“:
Hi Rich
Neil is spot on – glad to see the abolition of the wear and tear allowance doesn’t apply to resident landlords.
Comments: 10
1:01 PM, 31st July 2017, About 9 years ago
Reply to the comment left by “Neil Patterson” at “10/07/2017 – 11:26“:
Thank you for your reply.
I’m unclear from the reply, if I furnish an empty room for a lodger, would that be an allowable expense?
Member Since November 2013 - Comments: 1130 - Articles: 2
8:20 AM, 1st August 2017, About 9 years ago
Reply to the comment left by “Rich Green” at “31/07/2017 – 13:01“:
You can’t claim for providing an asset that didn’t exist before, you can only claim for a replacement. For example, if you bought a bed especially for your lodger, and there was no bed previously, you couldn’t claim but if you were replacing an old bed you could.
Comments: 10
5:07 PM, 26th August 2017, About 9 years ago
Many thanks for the additional reply and link Neil