What are the tax implications if I let out furnished accommodation?
If you receive income from furnished lettings, it is taxed under Schedule A, i.e. income from UK land and property. If you provide laundry, meals, domestic help, etc. for your tenants, then you may be able to claim that you are running a self-employed business – as you usually can if you are providing holiday lettings (see below). The advantage of running your property enterprise as a business means that there are usually more expenses you can claim against tax, and you may be able to use part of any annual surplus to provide yourself with a pension.
If you receive income from furnished lettings, it is taxed under the property income rules. If you provide laundry, meals, domestic help, etc. for your tenants, then you may be able to claim that you are running a self-employed business – as you usually can if you are providing holiday lettings (see below). The advantage of running your property enterprise as a business means that there are usually more expenses you can claim against Income Tax and, in addition, you may be able to claim business asset taper relief for Capital Gains Tax and business property relief for Inheritance Tax purposes. Find more landlord, tenancy agreement and buy-to-let information.
If you receive income from furnished lettings, it is taxed under the property income rules. If you provide laundry, meals, domestic help, etc. for your tenants, then you may be able to claim that you are running a self-employed business – as you usually can if you are providing holiday lettings (see below). The advantage of running your property enterprise as a business means that there are usually more expenses you can claim against tax, and you may be able to use part of any annual surplus to provide yourself with a pension.
