What are Furnished Holiday Lettings (FHL)
According to the UK Government, if you allow your furnished property to be used as holiday accommodation commercially for a minimum of 105 days in a year, your property will be qualified as a Furnished Holiday Let (FHL). However, you must not count the days when your property is used by you, your friends or relatives at zero or minimal rates. There are also some other criteria that your property must meet to qualify as an FHL.
As the rental income from such properties is taxed, you will need an expert holiday let accountant who can help you to minimize the tax exposure. However, here is the catch! There are several tax benefits that you can get if your property gets qualified for an FHL. These benefits can get lost for a tax year if you are not aware of maintaining the availability condition and occupancy pattern. Our expert accountants at CoreAdviz have years of experience in helping FHL owners. We will make sure that your property will always maintain the FHL status.
Tax Assistance for Furnished Holiday Lettings
Be it organizing the bookings or ensuring thorough property maintenance, FHL owners seldom have time to navigate the tax complexities. This can prove extremely challenging for those who have just started their holiday let business. Moreover, frequent tax changes made things worse and handling the tax issues became almost impossible! However, you need to relax as our skilled furnished holiday lets accountants offer valuable tax assistance. We will ensure that your financial records are set straight and assist you so that you can enhance your profits through your FHL property. Believe us, running a holiday let business can prove financially rewarding!
Tax Tips
Accounting for FHL Owners
Do you know that as an FHL owner, you can increase your rental income by adding a few facilities like a hot bathtub or Wi-Fi? Yes, there are many ways that you can know from our accountants, and one among these is by reducing the tax liability. So, whether it is claiming your FHL expense allowances or capital gains tax relief or suggesting whether to register for VAT or not, our accountants at CoreAdviz do everything. With our knowledge and experience, we can help you to focus more on your FHL business.
Yes, when you purchase a furnished holiday let, you have to pay Stamp Duty Land Tax (SDLT) at a higher rate. It is called Higher Rates on Additional Dwellings (HRAD) by the HMRC.
No, Holiday Lets available for the public for self-catering commercial accommodation for 20 weeks or more in a year are not subjected to council tax. They are subjected to business rates.
Yes, if you are an FHL owner, you will get tax relief under the Furnished Holiday Let Capital allowance. The allowance can be claimed on movable and immovable items of your holiday let.
No, a furnished holiday let falls under a separate category. According to HMRC, it is qualified as a trading business. So, it is neither considered a residential property nor a commercial property.
To maintain an accurate record of income and expenses as an FHL owner, you must have a business account for your holiday let.
Yes, income from holiday lets is subjected to VAT at the standard rate of 20%.
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Accounting for eCommerce package starts at £45 per month
Our Guidance on the “To do list”
As accounting consultants for an eCommerce business, we would suggest you with the following
Standard accounting procedure
The inflow of funds can be recorded when a bill is raised or the actual amount is received. Maintain a single standard throughout
Keep your invoices organized
Invoices play an important role in determining your tax liability. Keeping them organized and chronologically minimizes the changes of computation errors.
Keep your tax records handy
Tax invoices and receipts of the last 5 years are required to be preserved. In case the HMRC wants to verify data, they will ask for previous receipts.
Know your company’s status
As an entity your taxation will depend on your size. If your eCommerce is a private limited company, then its taxation policy will be different from self-employed and partnership.