What are the tax implications of running a holiday cottage?
There are a number of elements that can affect the taxes you pay on your holiday let, but with Sykes you won't need to worry as we're here for you every step of the way. The following is a list of tax implications to consider:
- Allowable Expenses - these will need to be deducted from your gross rental income before you can work out your taxable profit. Allowable expenses include any costs associated with letting your property.
- Capital Allowance - this is for your holiday property's furnishings as well as any equipment used outside the cottage for maintenance. You could even claim 100% of the cost for some environmentally-friendly purchases.
- Entrepreneur's Relief - if disposing* of a Furnished Holiday Let then you could claim Entrepreneur's relief.
- VAT - If your total rental income for the year does not exceed the VAT registration threshold then you will not have to pay VAT.
We want to make sure you have all the right information and plenty of help to make holiday letting work for you. To find out more, speak to a member of our experienced property team when it comes to holiday letting.
* Disposing of an asset can mean selling it, giving it away or transferring it as a gift, receiving compensation for that asset or swapping the asset for something else.