BTL Tax form question

curtis122

What is it with 'help' forms on tax returns they just end up confusing you even more!!!

I'm looking ahead to next years tax form I have a BTL it is fully furnished, our tenant has just moved out we have had to buy new sofa's, repainted the whole house, replaced the floor in the kitchen, new light in the kitchen.

I've been trying to find out where on the tax form you put all these expenses (we have all receipts) to offset our tax. I found info on 10% wear and tear (which we do fill in each year) and 'renewal' allowance.

The more I read the more I'm confused!! I would have thought you could claim 10% W&T each year then in the financial year you have to replace items like we have due to them being old you then don't claim the 10% W&T but you can then claim the renewal allowance then the following year claim your 10% W&T again as obvioulsy your new items won't be new anymore and been used for a year.

When I read the info though it makes it sound like you can only claim 10% W&T or 'renewal' allowance throughout the duration of your ownership and cannot in any tax year use the other. Is that right or am I reading about the wrong part and in regards to buying updated furniture/re decorating etc they go somewhere else on the form??? My head hurts!!

Icey77

As far as I recall if you claim the 10% wear and tear allowance you can't claim for furniture replacement expenses - it's one or the other and you can't swap between them either once yuo've starting using one.

The thinking is that if you claim wear and tear this is effectively spreading the cost of the replacement over the time that the previous item was in situ rather than having to shell out in one go.

Sorry to be the bearer or bad news!

If in doubt call up HMRC and check

anselld

It is one or the other and once decided you must stick to it. So you can either claim the actual costs as and when you renew or 10% of your rental income.

curtis122

Ok thats clear now thankyou. Icey77 that explained it spot on and clearly (ever thought of writing the help notes for Tax forms!!) This is why I love putting questions on forums I get a lot clearer answers!

So then on the basis of re-painting and the cost of the paint, I'm reading that this can be claimed against a 'repair' allowance also we had to replace the sink as it was in terrible condition so on that basis we should be able to get that also as it says under what you can claim as repairs 'things that are not removable if you were to sell it and leave'

The light in the kitchen had bare wires which was dangerous (god knows what the tenant did when all he had to do at the most was change a bulb!!) but as we have to change it and with situations like that are they classed as a repair?

anselld

curtis122 wrote: »

So then on the basis of re-painting and the cost of the paint, I'm reading that this can be claimed against a 'repair' allowance also we had to replace the sink as it was in terrible condition so on that basis we should be able to get that also as it says under what you can claim as repairs 'things that are not removable if you were to sell it and leave'

The light in the kitchen had bare wires which was dangerous (god knows what the tenant did when all he had to do at the most was change a bulb!!) but as we have to change it and with situations like that are they classed as a repair?

Yes they all sound like repairs to me, provided there is no element of inprovement/ upgrade.

There seems to be some debate about washing machines, etc. Theoretically you could remove them but I think you can still claim repair for these. On the other hand fitted carpets you would normally leave but I think they come under furnishings (10% W&T).

curtis122

You must have read my mind ! I did wonder about washing machines. Thankyou all for your help I understand now. Its the first time we have had to replace and repair anything in our house so far so the first time I've really had to think about it.

Icey77

Glad to be of help

Repairs are allowable expenses so go ahead and claim for the paint and decorator costs.

Where you have been claiming the W&T allowance you need to think along the lines of "ongoing maintenance" such as decoration, repairs, etc and "replacements" such as replacing furniture, washing machines etc.

Washing machine repairs are repairs, however if you need to replace the washing machine this is not a repair! You'd have to pay for it but you can't claim the replacement cost as an expense as you have been claiming the 10% wear and tear allowance which is meant to cover such items.

Hope you get it all sorted, if you're ever in any doubt I can't recommend calling HMRC enough - they've always been very helpful for me when I was needing an anwer on this type of subject and they're not the monsters many seem think they are!