Allowable expenses

[CarefullyDone]

As a follow up from my previous post, I am trying to budget and establish my likely income (or loss!).
As this will be my first HMO, I'd appreciate some adviceon allowable expenses, to offset against remtal income.

I have figured out I will have these bills to pay:

Mortgage
Drain Insurance
House Insurance
Gas / Electric
Sky
Water
TV Licence
Council Tax
Window cleaner
Cleaner

Are these allowable?
Is there anything else that I ought to consider? Travel.. stationary... replacement of white goods / furniture etc?

CD

[JakubL]

I would also include:

- Advertising costs
- Costs related to the arrangement of the mortgage, such as valuation/booking fees (as it is arranement of finance for a business)

Re the second point - http://www.thisismoney.co.uk/money/e...tgage-tax.html

Given the above I would suggest paying the arrangement fees rather than adding them to the mortgage balance if you are given this option.

[jpkeates]

Mortgage - interest only (relief being limited to 20% over four years to 2021) includes surveys and set up fees.
Drain Insurance - yes
House Insurance - yes (if it's part of the rental package)
Gas / Electric - yes (if it's part of the rental package)
Sky - yes (if it's part of the rental package) - and careful about which licence
Water - yes (if it's part of the rental package)
TV Licence - yes (if it's part of the rental package)
Council Tax - yes (if it's part of the rental package)
Window cleaner - yes
Cleaner - yes


travel - PPM allowance is easiest.
Stationary - for the property business only
white goods and furnishings - if renting fully furnished, currently there's a 10% allowance being replaced with actual costs being allowable

You haven't mentioned Broadband / Wi/Fi

[CarefullyDone]

Ah yes.. Broadband is part of the Sky package.
Can I ask what you mean by "part of the rental package"? I am renting out rooms. Should I define on the tenancy agreement?

The rooms are fully furnished, as are the communal areas. This includes oven, microwave, hob, dishwasher, washing machine, tumble dryer, television.

[jpkeates]

I meant you can only claim the item as an expense if it's included in the service the tenant's receive in return for rent (you can't just install sky for yourself and claim the cost back).

You should definitely describe on the tenancy agreement what is included, to what level and what isn't.

And you should definitely be careful what licence you buy from Sky, I'm surprised they allow someone to re-sell their broadband package.

[CarefullyDone]

Thanks for the reply! I had not considered that Sky would have an issue with this! I am not living in the house, so any items in the house will be for the sharers only.
So if I have a shared house setup, I should check with Sky (or Virgin!) to see if it is okay to do so in a shared house.

The things that I haven't thought of! I can see this is going to be a steep curve