Budget 2009 announces the repeal of the Furnished Holiday Lettings (FHL) rules

RabbitMad

wisconsin wrote: »

I am just about to sign the contract to buy a holiday cottage to let out weekly.

I can't personally but can I suggest that when you are up and running you include Gas / Elec and heating in your up front price. I will not rent anywhere that has coin meters / charges extra for heating and electricity and when I'm looking for a holiday I just skip those with extra charges.

lizziewizz

We are in the process of buying a holiday let for which we will be paying a separate sum for chattels. I believe that we are able to claim for 50% of the cost of these in the first year, which would have been followed by 25% and 25% in subsequent years. With the new regulations coming into effect in 2010 am I right in thinking that we will be able to claim the first 50% but will lose the capital allowance on the remaining 50%? Would we be better placed to get the chattels as cheaply as possible?

lizziewizz

Sorry - another question! do the new rules mean that ALL previous capital allowances are now null and void? How will this be if you need to replace a sofa? Will you be able to claim the full price of the new sofa in the year in which it was bought? Or does the removal of capital allowances mean that anything you buy for the property is no longer claimable? Am pretty confused... as you can see!!

silvercar

For furnished properties you can claim a wear and tear allowance of 10% of the rent or the actual cost of replacement items.

Madmel

I agree with the comments about including gas/electricity within the total cost of the accommodation. I state in my T&Cs that utilities, bedding and towels are included, although guests are welcome to bring their own linen or towels if they prefer.

From what I understand, Holiday Lets now have to be treated as a business for tax purposes, rather than as a way of reducing your own Income Tax bill. We are similar to Lucinia in that we have been making a small profit so this doesn't really apply to us.

For people starting out & buying a holiday let, make sure you keep accurate records of all your transactions. It may be worth speaking to the Council to ensure that you adhere to any rules they have on holiday lets. In this area, we have a limit of 14 weeks for a single let. I don't know whether this is standard or not, but the area relies heavily on tourism and I guess they don't want all the "holiday" accommodation used for 6 month lets.