Wear and Tear Allowance for furnished lettings

[ij_walton]

Hiya,
I’m a newbie so please bear with me. Any advice much appreciated.

This is in regards to a furnished property letting for 2012-2013 tax year. I’m in process of completing my 1st tax return. My accounts aren’t very complicated yet so not currently planning on using accountant....maybe that'll change!

I am a bit confused about the whole Wear and Tear Allowance and what I can and can’t include as an expense within “Property, repairs, maintenance and renewals” if I’m also applying the 10% Wear and Tear Allowance i.e. are fixtures and fittings seen to be part of W&T allowance or can you include these in addition ? I assume if it wasn’t furnished then I would be ok to include as expense
Some examples:
1) Repairing broken window (labour only) – assume I can include this as a repair expense
2) Costs of repairing broken shower and tap (new shower fitting\taps and labour)…
3) Replacing a broken boiler – cost of boiler and labour …
First off I thought I could include items 2 and 3 as valid expenses but now confused whether these would be seen as part of W&T allowance.
Have read some tax guidance notes but these confused me even more!
Cheers
Ian

[King_Maker]

Briefly :

1. Yes.
2. Yes, so long as the new items are not "improvements".
3. Yes - as 2. above.

The 10% W&T Allowance is more related to white goods and carpets etc.

[November14]

Hi Ian

Wear and Tear Allowance covers the following types of items:

movable furniture or furnishings, such as beds or suites,
televisions,
fridges and freezers,
carpets and floor-coverings,
curtains,
linen,
crockery or cutlery,
plant and machinery chattels of a type which, in unfurnished accommodation, a tenant would normally provide for himself (for example, cookers, washing machines, dishwashers).

The expenses you have mentioned above would be available as an additional deduction as long as they are not classed as improvements.

I would however, always advise that you consult a tax specialist in regards to these matters as there may be additional deductions that you are currently missing.

Kind regards

Terry

[ij_walton]

Thanks for the responses, much appreciated. Ok boiler would be seen as improvement as it was a new energy effiicient boiler - but assume i could include the labour as expense? I assume boiler wouldn't come under the energy effiiciency category as that's more for insulation etc ?

[King_Maker]

If the boiler itself does not qualify, the labour does not either. Both should then be deductible for CGT purposes.

How old was the boiler?

[ij_walton]

The old boiler was over 8 years old and was broken and couldn't be fixed and so had to be replaced. The old boiler was a combi-boiler - the new one was also combi boiler - the new one is a more modern boiler but you can't get like for like for an 8 year old boiler! so would this be seen as an improvement even though it was replacing a broken boiler???

[lurcherzip]

surely this boiler has to be put down as a repair. Those with any sense know that you will not keep repairing a boiler that is of that age . You have to repair it with a new one and i underline repair it with a new one. the other side of the coin if it was a capital expense, can you claim for two boilers, the first when it was installed the second when it was replaced. This new rule is a complete farce

[ij_walton]

after reading the last section of http://www.hmrc.gov.uk/manuals/pimmanual/PIM2020.htm it sounds like it could be classed as a repair ...hmm I suppose they don't make it simple to keep people in jobs