Wear & Tear Allowance for rental property

NewBe

Getting figures ready for my first Tax Return on a rental property. The property is a furnished let, so I believe I am allowed to claim a 10% wear & tear allowance.

However, I am not sure how I should be calculating this - the HMRC guide talks about using net rental income less any expenses which would normally be borne by the tenant?

So, if my rental income for the year was £6,000 and total expenses were £4,300 - would my wear & tear allowance be 10% of 6k or 10% of my profits?

Thank You.

anselld

10% of £6,000 provided the rent does not include things like utility bills, council tax, internet, etc. ( which are normally borne by the tenant)

http://www.hmrc.gov.uk/manuals/pimmanual/pim3210.htm

NewBe

Thanks anselld.

I recently had to replace a few carpets damaged by a previous tenant, so does this mean I can't put these down as an expense if I claim the 10% allowance?

anselld

NewBe wrote: »

Thanks anselld.

I recently had to replace a few carpets damaged by a previous tenant, so does this mean I can't put these down as an expense if I claim the 10% allowance?

That is correct. The 10% allowance is an alternative, you can't claim both.

Kynthia

As said above, gross rent may include bills, gardening services, cleaning, etc. As these expenses are things usually paid for by a tenant they cannot be used to calculate the wear and tear allowance. The value of these services would need to be deducted in order to calculate net rent.