Offsetting rental expenses

Comms69

Badgersrus wrote: »

Not sure you got the point - living expenses, vis a vis rent are related to the business of the flats. - No you aren't getting it. The business would not exist in my ownership if I had not sold my house and used the cash. - you invested in your future income, how is the state responsible for that? Arguably, the state is in a better position since the previous owner was mortgaged to the hilt so I pay more tax than the previous owner as I'm a cash buyer and pay at the higher rate. - And?

That aside, I think we've gone off piste somewhat. There are many cases where living costs are deductible, such as provision of accommodation for a caretaker. - which is directly related to employment. Meals can be claimed as a legitimate expense - only when used as part of business or in the course of work duties , The rules are often inconsistent and lack logic - for example much of the rules around what attracts VAT and what does not are bonkers. I was putting it out there, partly as a discussion, but perhaps hoping a smart person out there may have an angle. You can bet a pound to a penny if I was a multinational they'd find a way to right it off. So, in the spirit of bending the rules, loopholes and other avoidance schemes, any good ideas anyone? Previous negative posters may not apply, as they add nothing constructive to the discourse,

You don't get to dictate who does what. You want only the answers you want to hear, go pay an accountant (though they will still tell you largely the same thing).

Gabbs_the_Newt

OP - you are incorrect. The key that nobody has yet touched on (and I wouldn't really expect a non accountant to know this) is the phrase "wholly and exclusively". You cannot with reasonableness claim that your personal rental costs are wholly and exclusively incurred with respect to your rental business.


https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-case-studies#expenses-incurred-wholly-and-exclusively-for-the-property-rental-business

Badgersrus

Comms69 wrote: »

You want only the answers you want to hear.

As I said before, I was hoping to get some intelligent responses from smart people.

Comms69

Badgersrus wrote: »

As I said before, I was hoping to get some intelligent responses from smart people.

You did, just not the ones you wanted to hear....

AdrianC

Badgersrus wrote: »

Anselld, why do I not have a point? Whilst HMRC may say no, it does not necessarily follow their rules are not arbitrary rather than a reasoned position.

Whether they're arbitrary or reasoned is kinda beside the point. They ARE the rules. And, yes, you have to work within them.

Badgersrus

Gabbs_the_Newt wrote: »

OP - you are incorrect. The key that nobody has yet touched on (and I wouldn't really expect a non accountant to know this) is the phrase "wholly and exclusively". You cannot with reasonableness claim that your personal rental costs are wholly and exclusively incurred with respect to your rental business.

I understand this concept, As I said before, what I am suggesting is not realistic but logically the cost of rent is requisite for the purchase of the flats. It is the cost of capital, no different from the interest I would have paid had I borrowed the money. So it is, to a degree, unfair for HMRC to receive the revenue from the income from the flats but give no consideration to the other end of the equation.

Badgersrus

AdrianC wrote: »

Whether they're arbitrary or reasoned is kinda beside the point. They ARE the rules. And, yes, you have to work within them.

I prefer to question the rules rather than blindly obey.

AdrianC

Question away. It won't make the slightest difference to what you need to do on your next tax return.

(BTW, I don't think Phil Hammond reads or posts here, and he's the one you really ought to be taking it up with)

Badgersrus

Comms69 wrote: »

You did, just not the ones you wanted to hear....

I think you confuse smart with condescending, know-it-all trolling.

ValiantSon

Badgersrus wrote: »

Not sure you got the point - living expenses, vis a vis rent are related to the business of the flats. The business would not exist in my ownership if I had not sold my house and used the cash. Arguably, the state is in a better position since the previous owner was mortgaged to the hilt so I pay more tax than the previous owner as I'm a cash buyer and pay at the higher rate.

No, your rent is not a business expense! You chose to sell your home and invest that money in buy-to-lets, but that doesn't therefore mean that your ongoing accomodation expenses can be construed as a legitimate business expense. You made a choice about your living arrangements and the consequence is that you now have a higher monthly bill than when you owned a property outright. The fact that you used the proceeds from the sale of that property to invest in a business is utterly irrelevant as the ongoing cost of your present accommodation is not a necessary expense to the business. Your personal finances and your business finances are separate entities.

Badgersrus wrote: »

That aside, I think we've gone off piste somewhat. There are many cases where living costs are deductible, such as provision of accommodation for a caretaker. Meals can be claimed as a legitimate expense,

None of those examples are analagous with your situation.

Badgersrus wrote: »

The rules are often inconsistent and lack logic - for example much of the rules around what attracts VAT and what does not are bonkers.

The rules on VAT are logical, but you don't necessarily agree with them. That isn't the same as being illogical.

It is also irrelevant what the consistencies or inconsistencies of a different tax are.

Badgersrus wrote: »

I was putting it out there, partly as a discussion, but perhaps hoping a smart person out there may have an angle. You can bet a pound to a penny if I was a multinational they'd find a way to write it off. So, in the spirit of bending the rules, loopholes and other avoidance schemes, any good ideas anyone? Previous negative posters may not apply, as they add nothing constructive to the discourse,

You don't get to choose who posts and who doesn't. This is a public forum.

I, for one, have no interest in helping you find a way to get the state (and therefore every taxpayer) to foot the bill for your rent.