Can you claim service charge as a taxable expense even if it wasn't officially paid? We were originally the freehold of the building of two flats so we charged a service charge to the other flat and we paid ourselves. However we have now sold a share of the freehold to the other flat, so we stopped collecting and paying a formal service charge as we agreed it wasn't needed. Instead we would just split the cost of repairs when they were required. However I need to take out the equivalent cost of the service charge from my rental income for repairs. Can I put this on my tax return?
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You can't claim for a cost that isn't incurred (if accounting on the cash basis) or which is not ever due to be paid (if accounting on the accrual basis).
You can claim for the actual repair costs that are incurred.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). -
You can claim 50% of any cost paid for maintenance including 50% of the annual building insurance policy or
you can claim the annual service charge payment billed for your flat if the building is managed by an agent.Comment
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