What expenses can I claim for a furnished holiday let?

What are Furnished Holiday Lettings allowable expenses?

  • Utility bills or refuse collection.
  • Interest on loans associated with the property.
  • Advertising or letting agency fees.
  • Products bought for the property (cleaning products and welcome packs)
  • Maintenance and cleaning costs.

Can I offset furnished holiday losses against other income?

You can no longer offset furnished holiday letting losses against other income. This change came into effect from the tax year ending 5 April 2012. You can only offset furnished holiday letting losses against future profits from the same property.

Can I claiming capital allowances on furnished holiday lets?

A proportion of the purchase price of a furnished holiday let is deemed to have been to pay for the fixtures that were in place at the time. You are perfectly entitled to claim capital allowances on these.

Is furnished holiday letting a trade?

Since a furnished holiday let is treated as a trading business in terms of allowable expenses, it can also qualify for Business Property relief (BPR) for inheritance tax purposes.

What can I offset against tax on holiday let?

Mortgage interest relief Perhaps the biggest difference in tax between furnished holiday lets and buy-to-lets is that the full mortgage interest (section 24) can be deducted from the profits of FHLs. This relief has been tapered out for residential landlords and is now restricted to the basic rate of income tax (20%).

Do you pay tax on holiday lets?

The profit ultimately you make from you holiday let will be taxed as income and will be added to any other income you earn as part of your tax assessment. If you do make a loss on your holiday let this loss can be carried forward against the future profits on that same FHL business.

What can you do with FHL losses?

The effect is that the only relief available for a UK FHL loss is to carry it forward and use it against profits from the same UK FHL business (under s. 45). The loss cannot be set against profits from a non-FHL UK property business, nor can it be carried back.

Can you claim wear and tear on furnished holiday lettings?

The Wear and Tear Allowance applies to Landlords who let fully furnished properties. It does not apply to commercial, holiday let, partially-furnished or unfurnished accommodation.

What are allowable expenses for FHL?

Claim operating costs as allowable expenses to save tax on your FHL. Capital expenses are not the only costs you can offset against your profits. Additional costs you may incur to run your FHL such as management fees, cleaning and even the utility bills are all allowable expenses to offset against your profits.

Am I self employed if I have a furnished holiday let?

If material services are provided (akin to a hotel) then it is a trade and will be treated as self employment not Furnished Holiday Lettings. Whilst they are not actually trades, Furnished Holiday Lettings are treated as trades for some tax purposes and therefore have some tax advantages over other lettings.

Do you pay tax on holiday let income?

Income tax: As with any business, profits generated by your holiday let will be subject to income tax. However, your income tax can be reduced, legitimately, in numerous ways. If you have a mortgage on your FHL, you will be subject to paying interest.

Do you pay stamp duty on a furnished holiday let?

Stamp duty on Furnished Holiday Lets (FHL) and AirBnB properties. You will pay stamp duty on furnished holiday let properties and AirBnB listings. SDLT and the 3% SDLT surcharge will apply to holiday lets and serviced accommodation as HMRC state that they are a dwelling.