Allowable expenses on Tax Return

Adamjownz

Hi,
Ive searched the forum to find the answer to this so applogies if its a duplicated thread but my question is i have just had to replace the dishwasher in the property i rent out. Can i claim the full cost of this as a expense on my tax return?
I am also currently claiming the 10% wear tear expense as it is a furnished property.
Can i claim both the 10% wear tear allowance aswell as full cost of replacing the dishwasher or is it one or the other?
On a other note, if i can claim the cost of the dishwasher, i also purchased a 3yr breakdown warranty on it as a lump sum. Can i claim this aswell or just the cost of the dishwasher?
Thanks.

booksurr

I assume you are referring to 15/16 tax year?

as from April 2013 the whole renewals basis was abolished - although the legal basis of HMRC's statement to that effect has yet to be confirmed in statute or case law. Some tax accountants will entertain a claim for replacement of certain items on the basis they are fixtures - so in your case it rather depends on whether the dishwasher is a) built in (ie a fixture) and b) you want to risk a challenge from HMRC
http://www.hmrc.gov.uk/manuals/pimmanual/pim3210.htm

the renewals basis and W&T basis were mutually exclusive and have always been so , therefore if you have claimed both in the past you have submitted an invalid tax return - here is the history, note the final sentence "If a taxpayer had chosen to take the 10% wear and tear allowance then they could not claim later for the cost of replacing the assets." http://www.hmrc.gov.uk/manuals/pimmanual/pim3220.htm

so the simple answer to your question is you cannot claim renewals cost at all as it is invalid in 15/16

of course as from April 2016 the wear and tear allowance is itself abolished and you can only claim the renewals basis as they have gone back to that method only from 16/17 onwards

looks like you need to learn the basics of rental tax, start here : http://www.hmrc.gov.uk/manuals/pimmanual/Index.htm



the insurance policy cost is a perfectly normal eligible cost as it relates wholly and exclusively to the rental property. However, technically, as rental income is based on the "normal trading rules" you cannot charge the full cost in year one, you must charge 1/3 each year since that is the cost incurred by the rental business for each year of the life of the policy