Holiday let taxes?

Holiday let taxes?

9:46 AM, 8th December 2022, About 2 months ago 6

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Hello, I have just finished renovating my first holiday let. I am 20 years into BTL, so understand what I can and cannot claim in this area. But HL’s are new and I am reading about them, but it is still a little unclear.

Please do not say go and ask an accountant. There would be little point in posting this here if I was going to do that.

I can read the HMRC docs so feel confident I know what I can claim for, but would appreciate if someone could confirm.

It seems the capital allowances come into play with the holiday lets and I can see I can claim for my rewiring, new plumbing, furniture and pots and pans etc, the new kitchen and bathroom, plus the new flooring.

So do I just use the AIA which gives 100% write-off up to 1 million (I think). My total spend is only £28k so I am well under this amount.

Does anyone know if I could also claim for the insulation I put into the place? Maybe £3k including new plasterboard and studs.

I tried to call HMRC yesterday and waited 1h 10mins until I got through to a telehandler, who then tried to transfer me over to the technical team but cut me off instead.

On another issue, does no one else see our whole system of working has broken down? It is so frustrating waiting to get through to any institution today, or a 4 week wait to see a GP.

Thank you,

John



Comments

russell branch

12:12 PM, 8th December 2022, About 2 months ago

The system is certainly broken down in many areas of public life. The Land Registry is taking over twelve months to register new leases etc and the passport office up to three months to renew an existing passport. But what is worse is the blatant corruption in institutions we could previously turn to for redress such as the BMA, the police, the legal profession and our political representatives.

Tim

12:27 PM, 8th December 2022, About 2 months ago

For holiday lets, serviced accommodation and for ANY other commercial premises, we have an associate company that will produce a claim that even covers claiming for the kitchen sink for you to submit to HMRC. It's just a 3% of the claim charge by them. They do have to visit and take photographs etc and thereby make a very detailed claim. If you email me, I will give you their contact details. tim@splashconsultancy.com

Jonathan Cocks

13:15 PM, 8th December 2022, About 2 months ago

In reply to your reference to our whole system breaking down and not your holiday home question.
Yes I think we the citizens of uk have to have a real honest deep dive into all the things we have taken for granted for tens of years.
starting with the NHS, I cannot see how the numbers will work, I believe we are living longer , because those very clever scientists invent all these drugs and procedures to make us better and live longer. I don’t have any financial stats. But I guess and generalise, the older one gets , I am in my early 70’s , the greater the financial strain we put onto the NHS and social and care resources. How we restructure these taken for granted resources I haven’t a clue. But with a growing population AND AN AGEING POPULATION I think the bubble will burst and it’s our children and grandchildren who will have to work until they are 70 plus and have less to show for it in their retirement.
That’s not fair in my mind.

Dennis Forrest

15:12 PM, 8th December 2022, About 2 months ago

John - Nobody has answered your question so I will have a go. I have had a successful holiday let for the last 5 years. capital allowances will cover most of the items you mention. All your furniture, new carpets, new TV a new dishwasher (most guests want one).
However some of the items might better be classed as repairs such as your rewiring. Makes no difference tax wise you will still get the same after tax relief. Regarding your insulation and plasterboard then if this was replace wet or damaged plasterboard then this would count as a repair. I guess however that this outlay is just to improve your property and it is a capital expenditure to be added on to the price you paid for the property. You will get CGT relief but only when you sell it. My property has timber window frames and they are starting to go a bit rotten in spite of being painted on a regular basis. I will be replacing them next year with UPVC windows. This will count as a repair because it will be cheaper than repairing the wooden frames and save future maintenance. So there are a few gray areas and you are wasting you time asking most accountants. If you can't get a HMRC ruling just use your common sense and claim what you think is most relevant and see if it gets challenged.

John

19:39 PM, 8th December 2022, About 2 months ago

Thanks Dennis.

I am aware of these grey areas and have been claiming for DG for many years happily as it is allowed (on regular BTL).

It just seems unfair that an accountant can get through a claim for deductions but a regular person can't. That's how i see it when many people say "get an accountant" to look at it. I can look and see for myself what I can and cant claim for. It doesn't seem that hard to me to work out where i can deduct.

I have full photos of the detailed conversion as well if needed.

You've given me confidence to go ahead and do my own submission.

Dennis Forrest

23:10 PM, 8th December 2022, About 2 months ago

Reply to the comment left by John at 08/12/2022 - 19:39I have been doing my own property tax returns since 1995 when we bought our first BTL. I studied the tax rules and implications very carefully and have always done my own tax returns since 1995 without any help from an accountant. I have never been challenged or inspected by HMRC. I am meticulous in keeping all relevant paperwork for at least 6 years and all my properties are on Excel spreadsheets which I have on my computer, and backed up on DVD's, but of course also have hard copy print outs as well. I am relaxed about any HMRC inspection if it happens. We have pension income as well but property income is about 60% of our total income.

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