Expenses OUTSIDE the rent a room scheme

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Expenses OUTSIDE the rent a room scheme

    Hello everyone

    My name is David, I am a yet to be Landlord (read I am looking to buy a property and thinking about renting one or two rooms).

    My question is pretty straightforward but can't seem to find and answer.

    Under the Rent-A-Room scheme you have an allowance of £4250, free of taxes, but can not claim any expense.

    But how do you calculate expenses when you opt-out of the scheme? Do all the expenses/allowance of a normale rental still hold valid? Surely not for the whole amount I guess (would be too cool to be true).

    On a side note: I am also considering to just buy to let, but I am worried of tenants not paying rent, which would be a disaster considering I am taking on a meaty mortgage! I know is a silly question but does it happen often if you do the proper checks (or maybe rely on an agency doing the screening of the tenants?).

    #2
    Just a reasonable proportion. So, mortgage £100 per month. House has 4 bedrooms, kitchen and lounge, so 6 rooms. 2 bedrooms occupied by lodgers. Therefore 2/6th of mortgage is tax deductible.

    Comment


      #3
      Sounds good!
      Let me see if I understood correctly with and example closer to what I expect to be the situation.

      Flat with 1 Kitchen, 1 living room, 2 bedrooms (3 total rooms + kitchen). mortgage interests £500 (I wish!), council and service charge £100 (more realistic).

      Case A - 1 Lodger: 1 room each, shared use of kitchen and living room. I file as expenses 50% of mortgage interests, council tax and service charge (£300). Correct?

      Case B - 2 Lodgers: 2 rooms to lodgers plus shared use of kitchen. I can file 66% of the expenses (2 rooms out of 4 rooms, plus 2/3 of the kitchen) (£396 total). Correct?

      Comment


        #4
        Originally posted by Telometer View Post
        Just a reasonable proportion. So, mortgage £100 per month. House has 4 bedrooms, kitchen and lounge, so 6 rooms. 2 bedrooms occupied by lodgers. Therefore 2/6th of mortgage is tax deductible.
        Try reading what I wrote.

        Comment


          #5
          I tried. But doesn't help me understanding what my situation will be and doesn't point to a specific law.

          In your example you consider kitchen and loung as room but not bathroom, what if I rent the loung too? You also mention mortgage interest only, what other expenses can I deduct (I imagine all other expenses would be deductible, just a different portion compared to the let of the whole flat)?

          Comment


            #6
            The law is that expenditure must be wholly and exclusively for the purposes of the business for it to be deductible.

            Comment


              #7
              Flat with 1 Kitchen, 1 living room, 2 bedrooms. If you rent out both bedrooms as per Case B, where do you live. I'm confused. Regards Peter

              Comment


                #8
                Hi, in case B I would rent the living room as a bedroom (very common here in London).

                Comment

                Latest Activity

                Collapse

                • Reply to Damaged artwork expense
                  by jpkeates
                  If something is purchased wholly and exclusively for the business it's an allowable expense of one kind or another.
                  It doesn't have to be a sensible thing to buy, it just has to have been bought for the business.

                  If it were a gift it would not be allowable, but it's hard to see how...
                  27-09-2021, 08:10 AM
                • Damaged artwork expense
                  by jtufty
                  Hi all

                  Silly minor question really. Last week the tenant accidentally knocked a framed picture off the wall and smashed it. It was only a cheap thing (I guess value was £10). I went out and bought a replacement picture for her. (I know I didnt have to, but shes a good tenant). I bought...
                  24-09-2021, 10:35 AM
                • Reply to Damaged artwork expense
                  by ram

                  As per above, as the place is "part-furnished", which will not incude pictures on walls.

                  It's a gift to a stranger. ( They are not family, not close friends - etc. ) and not a claimable expence in any way..
                  ...
                  25-09-2021, 16:05 PM
                • Reply to Damaged artwork expense
                  by nukecad
                  I'd see this as an altruistic gift to your tenant and leave it at that.

                  My previous LL (although he had his faults) used to buy the 3 of us in his small HMO a £20 case of beer each at Christmas, I doubt he tried to claim it off tax.
                  25-09-2021, 15:46 PM
                • Reply to Damaged artwork expense
                  by jtufty
                  Its let "part-furnished". (she didnt have a bed, so I put a bed in there, and the white goods, and the [now-broken] picture and a few other bits n bobs)...
                  25-09-2021, 15:13 PM
                • Reply to Damaged artwork expense
                  by Section20z
                  You don't need to write anything. Retain the receipt and just include the appropriate amount in youR expenses/capital totals...
                  25-09-2021, 13:57 PM
                • Reply to Damaged artwork expense
                  by ram

                  We assume the place is let as furnished ?

                  I don't think pictures are classed as furniture / but then again, a mirror screwed to the wall - if broken by the tenant, then the tenant pays.
                  So pictures ? not sure.
                  I would charge the tenant the cost of replacement.
                  ...
                  25-09-2021, 11:43 AM
                • Reply to Damaged artwork expense
                  by jtufty
                  Thanks guys. I dont know what came over me! A momentary wave of altruism. Most unlike me!

                  I have the receipt. What should I log it as? Should I literally just write "capital expense" or should I be more specific such as "replacement of broken picture"?
                  25-09-2021, 06:45 AM
                • Reply to Damaged artwork expense
                  by jpkeates
                  It's a replacement item of furniture and its allowable as such.
                  There's an inevitable element of betterment when you replace one thing with another.

                  And £40 is neither here nor there as a capital item.
                  24-09-2021, 13:16 PM
                • Reply to Damaged artwork expense
                  by Section20z
                  That sounds definitely like an improvement as you didn't have to splash out £50 you crazy dude.
                  £10 down to repairs and £40 capital expense I reckon.
                  24-09-2021, 11:59 AM
                Working...
                X