Wear and tear allowance

Wear and tear allowance

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Can anyone advise on the current position for claiming 10% wear and tear allowance on rental properties?
Historically I have claimed this on partially furnished properties, but have been informed by HMRC that from 2013/14 it is only allowable on fully furnished properties, is this correct?
Thanks.

Replies (15)

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By cbp99
19th Nov 2014 18:05

the legislation requires

"sufficient furniture, furnishings and equipment for normal residential use". (Ittoia S308B).

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By TaxAngel
19th Nov 2014 22:16

Historically you should not have been claiming W&T either

The new legislation introduced for 2013/14 enacted the W&T concession. The 10% W&T allowance has always only been available where there was sufficient furniture etc for normal use. Strictly you should amend the prior years returns where you have incorrectly claimed W&T.

At the same time that the legislation was introduced, the renewals basis (where you could claim replacement cost of items, but not the initial purchase cost) was removed so it is no longer possible to claim for the renewal of items eg carpets, white goods, furniture in partly furnished and unfurnished properties.  Bad news for landlords of this type of property.

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By ArsalanShah
20th Nov 2014 00:04

It may also be worth knowing that

it does not apply to the fixtures that are an integral part of the buildings (baths,washbasins etc) You can only claim W&T Allowance on furnished properties (Click here) within UK excluding furnished holiday lettings.

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Portia profile image
By Portia Nina Levin
20th Nov 2014 10:13

The legislation was not introduced in 2013/14

It has been there since 2011/12, but the "furnished" requirement under the former concession was not significantly different.

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By chatman
20th Nov 2014 15:38

Can you claim for renewals?

I thought you could still claim for renewals. This thread, https://www.accountingweb.co.uk/anyanswers/question/furnished-except-beds , seems to say you can, but not being the sharpest tool in the box, I could be wrong.

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Portia profile image
By Portia Nina Levin
20th Nov 2014 15:22

This place

Is like the goddam Twilight Zone some days!

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Replying to David Heaton:
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By chatman
20th Nov 2014 15:37

Apologies and correction re renewals basis

Portia Nina Levin wrote:

Is like the goddam Twilight Zone some days!

Absolutely correct. Please accept my apologies. Thanks to PNL's succinct and in-character drawing of this to my attention, I have edited my comment to (hopefully) make more sense, although I am sure PNL will point out why it still doesn't.

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By RML
21st Nov 2014 18:55

Thanks for the comments - 2013/14 is the first year of rental for the property in question and it has sofa, kitchen table & chairs, TVs and all standard white goods, curtains etc...but no beds... Would this qualify for w&t if called into question??

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By RML
21st Nov 2014 18:55

Wear and tear allowance on rental properties
Thanks for the comments - 2013/14 is the first year of rental for the property in question and it has sofa, kitchen table & chairs, TVs and all standard white goods, curtains etc...but no beds... Would this qualify for w&t if called into question??

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By pauljohnston
24th Nov 2014 12:06

But wont work for 2013-14

Can only be furnished from the date that the contents fit the W & T definition

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By arnold28
24th Nov 2014 13:06

This article from Taxation may help

http://www.taxation.co.uk/taxation/Articles/2013/01/23/298411/wear-and-tear

To quote -

The legislation is straightforward in that it says that the dwelling house must have “sufficient furniture, furnishings and equipment for normal residential use” (ITTOIA 2005, s 308B(1)(b)).

In other words, a tenant needs to be able to move in and live without being required to provide anything other than their clothing and food.

They may of course, in reality, feel the need for high-definition television, computers, games consoles, a food mixer or some other piece of equipment they choose to bring in, but they could live in the property without it.

“Normal residential use” is a somewhat vague term and what is necessary may change over time but, in general, certain items such as beds, chairs, tables and a cooker are pretty much essential.

Some landlords will try to stretch this definition, but a camp bed and microwave are probably not going to be enough to convince.

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By JimH
24th Nov 2014 13:26

furnished except for beds ...

...  has an interesting thread here from a while back.  

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By dipenjoshi
31st May 2016 09:40

Hi
can anyone assist with the accounting entries for the wear & tear allowance?
How would it effect the balance sheet?

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Replying to dipenjoshi:
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By pauljohnston
01st Jun 2016 10:43

Wear and Tear as it was is a tax deduction just like capital allowances. If it was a limited company the only adjustment I can see is a reduction in Corp Tax. For unincorporated businesses I can see no reason that it be included at all.

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Replying to dipenjoshi:
By Duggimon
01st Jun 2016 11:11

Too slow, in waiting two years to respond to this ancient question you've missed your chance and the wear and tear allowance has been axed.

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