Bill Loryman

Registered with
Thursday 4th July 2013

Latest Comments

Total Number of Property118 Comments: 6

Bill Loryman

15:53 PM, 25th June 2013
About 7 years ago

Capital Allowances - Tax savings for HMO and Multi Let owners

Dear Phil, during our extensive compliance checks for each and every client we judge each case on its merits, and in accordance with HMRC's own Plant & Machinery guidance via its published toolkit - see here:-

We will only proceed if we are satisfied that the client is entitled to claim Capital Allowances on this property, as our compliance work establishes that no prior claims have been made on this property.
We will only proceed if we are also satisfied that the property is in a qualifying activity; being that it is a UK rental property, and held as a fixed asset of the owner with a view of long term profitability.
We will only proceed if we are also satisfied that it is a qualifying building. Our client informed us that the property is let to at least 2 unrelated households, and from our survey, the property consists of dwelling areas, for which we have not identified any Plant & Machinery, and non-dwelling areas.

As you will be aware, Section 35 0f CAA2001 states:-

“Expenditure incurred on the provision of plant or machinery for use in a dwelling house is not qualifying expenditure for an ordinary property business, an overseas property business or the special leasing of plant or machinery.
There is no definition of ‘dwelling house’ for the purpose of CAA01/S35 so it takes its ordinary meaning. A dwelling house is a building, or a part of a building. Its distinctive characteristic is its ability to afford to those who use it the facilities required for day-to-day private domestic existence. In most cases there should be little difficulty in deciding whether or not particular premises comprise a dwelling house, but in difficult cases the question is essentially one of fact.
A person's second or holiday home or accommodation used for holiday letting is a dwelling house. The common parts of a building which contains two or more dwelling houses will not comprise a dwelling house, although the individual dwelling houses within the building will do so. A hospital, a prison, nursing home or hotel (run as a trade and offering services) are not dwelling houses."

Both RCB 66/08 issued 29th December 2008, and RCB 45/10 issued 22nd October 2010 seeks to expand and define what dwelling areas are.
As RCB 45/10 is clear that a property which consists of self-contained flats or rooms, which afford the inhabitants the necessary assets for ‘private domestic existence, plant & Machinery allowances may be claimed for the communal areas. For properties which consist of rented rooms, which share communal rooms, such as a lounge and kitchen, these are all deemed to be dwelling houses and as such Plant & Machinery cannot be claimed. The areas within the same property which are not therefore necessary for private domestic existence (access areas, storage, secondary reception rooms and so on) are still non-dwelling areas and as such can be claimed for.

I have sought to receive detailed guidance from HMRC CT & VAT Offices in Parliament Street on this matter a number of times, but have not received any response.
As such, I take the reasonable approach that Plant & Machinery may be claimed on all areas which are NOT ‘necessary for private domestic existence’ within a multi-occupancy property as being those which are ‘non-dwelling areas’.

RCB 45/10 highlights that certain rooms can be part of the 'dwelling house' and others are not. The phrase 'each flat comprises a dwelling house - comprises, or "consist of, made, contain, include" a multi-occupancy flat can include a dwelling house and non-dwelling house.

It is also important to see what the guidance did NOT say. It doesn't say that the whole of a multi-let is a dwelling. It doesn't say that no claims are allowed, indeed even at the bottom of the 45/10 brief it confirms that claims will be accepted under these new rules.

For those premises which comprise self-contained rooms, it is very clear, and for those properties which are HMOs, we separate the ‘dwelling house’ part of the building and the non-dwelling house part, as per s.35 CAA2001 and calculate a claim for plant & machinery.

Hence, I can confirm that the claim includes ONLY the valuation of the Plant & Machinery on the ‘non-dwelling’ areas of the property in question.

It is important also to state that we have of course been challenged by various HMRC inspectors across the country, and upon discussion of our interpretation and reasonable approach, they have accepted and agreed each CA claim we provide.

It is also important to say that some properties will not qualify, and as such no CA's can be claimed, some flats in multiple occupancy are a prime example here, but the majority of student & professional type houses and larger establishments do qualify, and we have a great track record to show.... Read More

Bill Loryman

10:48 AM, 29th May 2013
About 7 years ago

Capital Allowances - Tax savings for HMO and Multi Let owners

Paul, this is a complex area and requires working knowledge of HMRC briefing statements 66_08 & 45_10.

You may be aware that within CAA2001 it clearly states that no Capital Allowances can be claimed on 'dwelling houses'. Although HMRC have not defined what a dwelling house is, their respective briefing statements are their interpretation of what this constitutes.

A reasonable approach and one which we successfully claim CA's on is that the non-dwelling areas of a property, or communal areas that are not ' necessary for private domestic existence' and that contain qualifying Plant & Machinery, qualify.

Although HMO's are residential in nature, the qualifying requirements for council tax, rates and licencing are a very different set of requirements for that of tax relief. These properties according to RCB45_10 issued by HMRC on 22nd October 2010 can contain dwelling and non dwelling areas as we have proved numerous times.

If you would to discuss this further please contact Bill Loryman on: 01327 340 408 Read More

Bill Loryman

7:10 AM, 14th May 2013
About 7 years ago

Capital Allowances - Reduced tax bills for HMO owners?

The percentage charges are based on the value of. the Capital Allowances we identify for you. Usually between 4.5 to 7% and vary slightly depending on our work involved. Our fees are always made clear in the illustrations of the tax savings we provide for each client. and are paid out of the savings made. We have a 100% track record of successful claims with the HMRC.... Read More

Bill Loryman

7:01 AM, 14th May 2013
About 7 years ago

Capital Allowances - Reduced tax bills for HMO owners?

Most certainly. Getting involved in the planning sage means you can maximise your ECA(enhanced capital allowances) and there may be opportunities to claim LRC(land
reclamation relief) if there is contamination present as well as the regular Plant & Machinery Allowances. Our in-house surveyors will be able to asses the details from a site visit but please call me so I can take details and provide a no obligation illustration of the likely tax savings for your project.... Read More

Bill Loryman

15:16 PM, 10th May 2013
About 7 years ago

Capital Allowances - Reduced tax bills for HMO owners?

To Joe blogs,
Our standard terms include the no claim-on fee arrangement, we have a 100% success record with the HMRC. We only charge a small percentage of the savings
identified by our surveyor and there are never any costs to our clients if we do not
proceed with a claim.
Bill loryman... Read More