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Bed and Breakfast trade

I am looking for assistance with my understanding or the tax position of a bed and breakfast

I wanted to ask for some assistance from colleagues on this site as to the options available to a client with a B and B.

The property was built solely to be operated as a Bed and Brekfast and the rooms are 18. Client and family live in and use 2 rooms.

I am looking for guidance as to the treatment of the business mainly as the clients reside. 

There is note on HMRC website which says if three or more live in the house to use a flat rate amount of £650 but I want to check in relation to mortgage interest. Surely the client can’t just claim the £650 and have the business buy them the best food, toiletries, linen, the best of TV’s etc and they just pay £650 per month?

The business typically always closes for two month at end of year does this affect claims

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06th Oct 2018 11:36

Try this large 5 office practice, they may be able to help:

http://callanaccountancy.co.uk/

"We have won the 2016 Tax Team of the Year in Scotland & 2016 Recognised Leader in Business Taxation in Scotland award."

http://callanaccountancy.co.uk/award-winning-accountancy-firm-glasgow/

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By jcace
to Accountant A
07th Oct 2018 16:30

From your position of anonymity, you frequently advise non-accountants that "AccountingWEB.co.uk is the largest independent online community for accounting and finance professionals in the UK", and yet when an accountant asks a genuine question, you respond with a similar level of non-answer sarcasm.
It's this level of response that I am sure puts people off asking questions. I've yet to meet anyone that knows everything, so it's always helpful when someone asks a question, as the chances are, there's someone else that needs the answer too.
Let's not make AWeb a place where a question can only be asked if the answer is technically challenging or where questions with easy answers are mocked and derided.

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to jcace
07th Oct 2018 16:45

Well, to be fair, Mr Ward didn't endear himself to members by throwing a fit of pique when he was simply asked for clarification of his last query.

What's your answer, jcace ? I'm sure that folk will be put off asking questions if they don't get an answer .........

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to jcace
07th Oct 2018 18:07

Thank you for your comment and you are quite correct. This site should be about support and we all have a very good idea about our guidance we offer to clients but occasionally it is nice to reach out to others and ask for their expertise. We all come across a query which makes us think and nice to just have a answer which their members can read. Away back when I first joined this site I learned a lot from reading these answer but in past 12 years it has changed from support to smugness. So thank you and others who just assist rather than create negativity.

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to stephenward69
07th Oct 2018 18:38

You're welcome.

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06th Oct 2018 15:19

A bit less time on entering awards and more on research may help.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim75015

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to lionofludesch
07th Oct 2018 19:45

Thank you was rude of me not to acknowledge this. Yes I’d read this before posting as familiar with this HMRC notice was looking for other experiences.

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to stephenward69
08th Oct 2018 08:01

stephenward69 wrote:

Thank you was rude of me not to acknowledge this. Yes I’d read this before posting as familiar with this HMRC notice was looking for other experiences.

It tells you exactly what is or isn't included in the £650 a month. If it's not included you need to make some other adjustment based on the particular facts of your case. Number of rooms, Floor area, etc.

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By Matrix
07th Oct 2018 18:37

I don't know the answer but have always found AWeb a good read in learning something new. When a question is posted, it is of no use to the next person with a similar query if all the responses are "get an accountant" or "you should know this".

I don't see anything wrong with the OP - the heading, sub-heading, facts, question and the OP's own research seem to fit with the purpose and spirit of Any Answers.

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to Matrix
07th Oct 2018 18:42

The answer's in the link I posted yesterday if anyone can be bothered to click on it.

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to Matrix
07th Oct 2018 18:56

Thank you for your comment. I agree with you I have previously always found it a good go to place just to comfort what we know and just for any additional tips experienced professionals have.

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12th Oct 2018 18:45

The best of TVs etc would not I imagine meet the condition in s94I(1)(d). Even if they weren't capital.

But I also imagine that the basic premise is that the private element is fairly consistent. So having a couple of months during which the business shuts down should not affect the £650 disallowance for those months.

Of course that doesn't mean that e.g. eating out at the best of restaurants would be allowable (in or out of season). But again you shouldn't really need to read as far as ss(1)(d) to know that.

I confess to finding 1(d) hard to get my head round. Wholly and exclusively for business purposes is easy - one non-business purpose is enough to preclude a deduction. But "mainly" business purposes? Does that mean you have to count how many business purposes there are (can there ever be more than one - profit?) and how many non-business purposes?

The only pragmatic application I can think of is to assess use not purpose. But that's not what it says.

And Lion's BIM extract doesn't even mention this test as far as I can tell.

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to Tax Dragon
12th Oct 2018 19:13

Thank you

Your comments and guidance are very much appreciated

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