Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • monkeynook
    • By monkeynook 10th Jul 17, 2:02 PM
    • 4Posts
    • 0Thanks
    monkeynook
    Renovate and Holiday let our Barn
    • #1
    • 10th Jul 17, 2:02 PM
    Renovate and Holiday let our Barn 10th Jul 17 at 2:02 PM
    Hi all,

    Looking for some very rough advice here before talking to an accountant.

    We have our own property and some barns which we have just had planning permission to convert one to a holiday let.

    My question is, is it advisable, or even possible, to set up a company through which we renovate the barns incurring all the costs and then use the company to let the barn out?

    Obviously with the idea of offsetting costs or renovation/ upkeep from rental income and then paying the company owners an income?

    Or is this just not possible, would the company have to own the barns and then our house as well as its all part of the same deed? Basically almost treating the barns like a mini 'estate'

    Any initial feedback would be helpful, alternatively is the easiest course just to do it through ourselves and fill out self assessment form on the income from the holiday let. Would we be able to offset any costs that way?

    Many thanks
Page 1
    • Guest101
    • By Guest101 10th Jul 17, 2:07 PM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    • #2
    • 10th Jul 17, 2:07 PM
    • #2
    • 10th Jul 17, 2:07 PM
    Yes it's possible, HOWEVER, who would own the barns? Are you going to split up your land and assets?


    You can still offset costs without having a company.


    Have you checked local business rates? Many holiday lets struggle with those
    • monkeynook
    • By monkeynook 10th Jul 17, 2:44 PM
    • 4 Posts
    • 0 Thanks
    monkeynook
    • #3
    • 10th Jul 17, 2:44 PM
    • #3
    • 10th Jul 17, 2:44 PM
    thanks, no we wouldn't want to split them up so assume it could not be done through a sep company.

    Do we just offset costs through self assessment then I assume? Obviously a question for an accountant to advise us but would those be all development costs or just the running/ maintenance?

    Good point on business rates! do these apply to holiday lets regardless of ownership structure?
    • Guest101
    • By Guest101 10th Jul 17, 2:58 PM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    • #4
    • 10th Jul 17, 2:58 PM
    • #4
    • 10th Jul 17, 2:58 PM
    thanks, no we wouldn't want to split them up so assume it could not be done through a sep company.

    Do we just offset costs through self assessment then I assume? Obviously a question for an accountant to advise us but would those be all development costs or just the running/ maintenance?

    Good point on business rates! do these apply to holiday lets regardless of ownership structure?
    Originally posted by monkeynook
    Yes, you're running a business, and that business needs to pay business rates.
    • Ozzuk
    • By Ozzuk 10th Jul 17, 3:51 PM
    • 1,081 Posts
    • 1,608 Thanks
    Ozzuk
    • #5
    • 10th Jul 17, 3:51 PM
    • #5
    • 10th Jul 17, 3:51 PM
    Speak to an accountant but from memory (I had holiday lets) you couldn't offset any development costs, just maintenance.

    And yes, business rates will apply.

    If you currently mortgage your property that could also cause issues, you'll need to talk to your mortgage provider for advice.

    You'll also need public liability insurance.

    Can be good money though, and it is a very easy business to run.
    • monkeynook
    • By monkeynook 10th Jul 17, 7:22 PM
    • 4 Posts
    • 0 Thanks
    monkeynook
    • #6
    • 10th Jul 17, 7:22 PM
    • #6
    • 10th Jul 17, 7:22 PM
    great thanks people. Yep going to talk to an accountant just wanted a vague idea of what I was talking about first!
    • 00ec25
    • By 00ec25 10th Jul 17, 7:41 PM
    • 4,535 Posts
    • 3,916 Thanks
    00ec25
    • #7
    • 10th Jul 17, 7:41 PM
    • #7
    • 10th Jul 17, 7:41 PM
    a holiday let (furnished holiday let or FHL) is treated in tax in a different way to "normal" letting income. Crucially FHL is regarded as "trading" activity and therefore they can claim costs in a different way to a "normal" landlord whose rental profit is regarded as investment income, not trading income. They also deal with losses differently. However, the renovation costs are not deal with differently, it is likely that many of them will be regarded as capital expenditure, so to be offset against your CGT when you eventually sell the property.

    normally a holiday home will be subject to business rates because it is regarded as a trading activity.

    very wise to see an accountant as you will need proper advice on a lot of details which it is pointless to try and cover in a few lines on a forum. If you want to get some background knowledge before seeing the accountant then read this as it is the rules you must follow:

    https://www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2015
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,758Posts Today

6,808Users online

Martin's Twitter