FHL and Mileage

[CG]

Hi

As a FHL is treated as a trade can mileage at 45p/25p be claimed rather than a proportion of car running costs. I am getting conflicitng advice here - I have been told both yes and no from an HMRC webinar.

Also, at the start of a FHL can existing white goods in the house and all new furniture and fittings all be claimed as 100% AIA?

Many thanks for any help here.

[bd6759]

Neither simplfied expenses nor the cash basis for calculating the profits of a trade can be used for calculatimg the profits of a UK property business. This is because only the trading provisions listed at s272 ITTOIA can apply to a UK property busienss.

Fixtures you bought with the house, which are still in the house when the business starts and have not been used for another purpose, can attract AIA. You should have them professionally valued because, presumably, the purchase price does not list them separately.

[robbob]

CG

As a FHL is treated as a trade can mileage at 45p/25p be claimed rather than a proportion of car running costs. I am getting conflicitng advice here - I have been told both yes and no from an HMRC webinar.

Sounds like hmrc make a complicated set of rules and not know them themselves when it matters - the property income manual confirms that use of the mileage (and actual) method is fine with regard to property income - i haven't seen anything to the contrary either that would make things specifically different for FHL as compared to the normal Property income rules in this regard.


https://www.gov.uk/hmrc-internal-manual ... al/pim2210

The landlord may use a car or van partly for business and partly for private purposes. If so, they can split the running costs on a mileage basis and claim a deduction for those journeys undertaken wholly and exclusively for business purposes

bd6759
nor the cash basis for calculating the profits of a trade can be used for calculating the profits of a UK property business.

It's probably only an aside/footnote here as it doesn't look like it is relevant to the OP's question - but hmrc will normally allow use of the cash basis subject to the following conditions being met - as described in pim1101

the case is small; by ‘small’ we mean where, for any year, the total gross receipts of a rental business (before allowable expenses are deducted) don’t exceed £15,000, and
the ‘cash basis’ is used consistently, and
the result is reasonable overall and does not differ substantially from the strict ‘earnings basis’.


https://www.gov.uk/hmrc-internal-manual ... al/pim1101