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Where Taxpayers and Advisers Meet

BTL Refurb - Deductible Expenses (mileage)

Sashxxx
Posts:15
Joined:Thu Mar 12, 2020 4:58 pm
BTL Refurb - Deductible Expenses (mileage)

Postby Sashxxx » Wed Nov 03, 2021 4:41 pm

Hi,

Wondered if anyone knows the rules on tax-deducting mileage off rental income when refurbing my BTL property please.

I do not use a Letting Agent. My BTL is 30 miles from my home. I am making regular trips back and forth to meet tradesmen, clean and refurb the property - I estimate it will take 2 - 3 months to fully refurb; which will add up to a fair amount of miles traveled to do so.

Is this fully tax-deductible please, and if so at what rate please? I have a 2L Diesel car.

Any help much appreciated thanks :D

bd6759
Posts:3745
Joined:Sat Feb 01, 2014 3:26 pm

Re: BTL Refurb - Deductible Expenses (mileage)

Postby bd6759 » Thu Nov 04, 2021 8:52 am

HMRC are remarkably generous here. Their own guidance here-

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2220

The guidance jumps straight to the place of business test, and in your case the travel would be allowed. The guidance is seriously flawed because it over-simplifies a complex topic. It does not consider subsequent case law such as Samaritan v HMRC.

But you are entitled to rely on their guidance, so you can claim travel cost.

What you need to consider is whether the refurbishment is a repair or enhancement. If an enhancement all the costs, including travel, will be capital costs.

topgearfan2008
Posts:4
Joined:Wed Jan 12, 2022 12:24 pm

Re: BTL Refurb - Deductible Expenses (mileage)

Postby topgearfan2008 » Wed Jan 12, 2022 10:16 pm

Yes I confirm this, as I always claim for the milage when refurbing properties (only 6 miles round trip in my case) but it does add up if it drags on for daily trips for months.

I just keep a milage log of date, purpose of trip (i.e. what exactly I did each visit) miles, start postcode, destination post code, and use the HMRC 45p rate per mile, and submit it along with my books to my chartered accountant each year.

This was their recommendation, just incase it is ever called into question, it is easy to justify several years down the line!

Sashxxx
Posts:15
Joined:Thu Mar 12, 2020 4:58 pm

Re: BTL Refurb - Deductible Expenses (mileage)

Postby Sashxxx » Fri Apr 29, 2022 12:45 pm

Thanks for the replies both. Sorry it took so long ha ha I am only just coming to look at my Tax Return after 6 months of refurbing the property.

The refurb is replacing like-for-like (i.e. old blown laminate floor with another laminate floor, carpet with carpet, lights with lights) and repairing tenant damage. My biggest issue now is that it is an 86 mile round trip to get over there and we have made many trips. I have documented every trip though, as advised. With today's fuel costs the tax-back just about covers the actual cost of fuel.

Thanks very much :)


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