Tax breaks for barn conversion to Furnished Holiday Let

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
Conkers
Posts: 3
Joined: Wed Aug 16, 2017 11:13 am
Location: Rural, UK

Tax breaks for barn conversion to Furnished Holiday Let

Post by Conkers »

We are well on the way with having a barn converted on a field we have owned for years, and are looking for any tax breaks.
It's totally clear on HMRC website that as the work is for rental property, we can't get the 5% VAT rate.
I have also discovered that for a FHL I can claim Capital Allowances for quite a lot of things including Fixtures and Fittings, even before I start my 'business'.
I'm not sure though if any structural work, or overheads in the significant conversion costs can be claimed in any way. I have already claimed a little professional advice against the (very small) rental for the field, but suspect that might be it.

Thanks
In the discovery phase.....
newtimber
Posts: 1945
Joined: Sat Nov 24, 2012 5:57 pm
Location: Brighton
Contact:

Post by newtimber »

Perhaps you convert it to a normal residential property and get the 5% VAT and then later on change it to an FHL? Paying 20% VAT on conversion costs is a huge waste of money which will take you years of profit to recoup. The only way it'll make sense is if you are already VAT registered anyway and can then reclaim it all. But if you are VAT registered, you have to charge guests 20% VAT which means you won't be competitive.
Rambling
Posts: 10
Joined: Sat Apr 14, 2018 10:06 am
Location: Anglesey. North Wales

Post by Rambling »

Surely it depends on the Planning Conditions stipulated for the 'conversion'. If its for a holiday let then you can't claim the VAT relief.
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