Setting up own maintenance co to work on own portfolio

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    Setting up own maintenance co to work on own portfolio

    Hello - I have just retired as a builder/plumber. I have 4 rental properties and find it frustrating that I do work on these properties and yet cannot claim for my labour costs. I am considering setting up a small handyman company to do odd jobs for neighbours, family and friends. Could I then invoice myself when doing work on my own properties. I realise I will have to pay income tax on my income from the business, but could equally off set works vehicle, etc. Furthermore, I want to extend one of the houses and then sell it. Could I also invoice myself for my labour which could be set against Capital Gains tax when selling???
    Thank you in advance for any advice offered.
    Kev

    #2
    Connected companies invoicing each other is always going to look dodgy.
    It's one of those things that only huge companies seem to be able to get away with.

    If you are legitimately working for many others and occasionally working for your property business it's probably going to be OK.
    But it's not guaranteed to be OK, it's a question of degree and HMRC may take the "wrong" view.

    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      You have to understand the way your income is taxed by HMRC.

      e.g 1. Your left hand receives £5000 from doing handyman jobs and your right hand receives £10, 000 profit from rental properties.

      Your total annual income .= £5000 + £10,000 = £15,000 and you will pay tax on this income.

      e.g 2 Your left hand receives £5000 from doing handyman jobs.and your right hand receives £10,000 profit from rental properties but your left hand fixes a leaking tap and invoices the right hand for £10,000.
      So at year-end, your left hand receives £15,000 from doing handyman jobs but right hand receives £0 profit from the rental properties.
      Your total annual income = £15,000 + £0 - £15,000. and you will pay tax on this income.

      So Tax Office has ruled that you are not allowed to charge for your own labour. .

      Re ; Adding kitchen extension or conservatory to a house and selling, you may be charged capital gains tax on the profit but you are not allowed to charge for your own labour.

      Comment

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