In the recent emergency budget, I read that the tax changes that they were going to make to my holiday cottages have been stopped? What has actually happened and will I still receive the beneficial tax reliefs as in previous years?
You are correct in identifying that Furnished Holiday Lets has been saved from being axed. The proposals announced by the previous government could not be enacted due to time constraints, while the new coalition has left the legislation alone (for the time being). This means that the holiday lets will be treated as trade and you could offset any losses against your other income, claim capital allowances and obtain more favourable capital gains tax treatment if you sell.
I am just starting out on my first business and I am not too sure what types of expenditure I can offset against my income (if I have any!). For example, I will need to rent premises out for storing my materials and equipment. Could I claim for this?
Absolutely! The rent, any rates, light and heat etc. related to these premises are allowable for tax purposes. By this I mean that these expenses can be deducted from your income before you calculate what your tax liability will be. There are many items you can claim tax relief on, some of which would be specific to your business. As a rule of thumb, if you incur any costs that relate to the performance of your business then it should be allowable. It is also important to keep receipts. Whilst I am unable to give you a full response in this reply, further guidance can be found on the H M R C website or alternatively you should contact your accountant who should explain in detail the types of things you can claim.
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