Claiming trading allowance for cleaning own FHL

Can my client claim the £1000 trading allowance for cleaning their own FHL - no other self emp inc

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Hello 

I have a client who owns a FHL. 
They are doing the weekly changeovers and laundry themselves. 
Can they claim the £1000 trading allowance for doing this? 
They do not have any other self employed income. 
 

Thanks in advance. 

Replies (19)

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By jonharris999
17th May 2024 06:57

No. This activity is not trading.

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By Tax Dragon
17th May 2024 08:02

Being self employed doesn't mean you pay yourself. In fact, it's not possible to pay yourself and the question you ask cannot arise in any meaningful sense. (That's why it's not specifically provided for in ITTOIA.)

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Replying to Tax Dragon:
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By Helen B
17th May 2024 08:27

Thanks. Not so much as them
Paying themselves - more the FHL business could claim £1000 for cleaning and laundry as an offset cost.

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Replying to Helen B:
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By Tax Dragon
17th May 2024 08:51

No trading allowance, as Jon says, but the property income allowance is available. Obviously you cannot claim that as well as actual costs, it's one or the other.

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Replying to Helen B:
RLI
By lionofludesch
17th May 2024 19:03

Helen B wrote:

Thanks. Not so much as them
Paying themselves - more the FHL business could claim £1000 for cleaning and laundry as an offset cost.

You can't contract with yourself.

I've heard better plans down the pub.

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Replying to lionofludesch:
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By Paul Crowley
17th May 2024 19:09

His fees are cheaper as well

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Replying to Paul Crowley:
RLI
By lionofludesch
17th May 2024 19:40

Paul Crowley wrote:

His fees are cheaper as well

[chuckle]

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DougScott
By Dougscott
17th May 2024 09:21

Are you sure you have the skills to represent an FHL client? For starters FHL income is not self-employment, it is property income, and you can either claim the £1000 property income allowance against rental income OR the actual expenditure incurred. I would be suprised if actual expenditure on an FHL was less than £1000 as you need to let out for at least 15 weeks to qualify as an FHL and can claim much the same expenditure as a trading business including capital allowances on fixtures and fittings which can be a substantial portion of a property's value (one third in a recent client's case) and mortgage interest. Of course the regime is being abolished next April so make the most of what you can claim now!

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Replying to Dougscott:
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By Helen B
17th May 2024 09:48

Thank you Doug Scott for your reply. And thank you also for your interest in my skills. I have been an accountant for many years (with many FHL clients - I live in Cornwall and there’s a few here) and unfortunately its comments like this that put so many people off asking questions on here.
Thank you for your input and to the others for clarifying this situation for me.

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Replying to Helen B:
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By Paul Crowley
17th May 2024 11:18

If you have been doing this for years then how come this clever idea has not come up before?
Was this a clever idea from a client?
Or worse a new client that has been doing it for years, and the prior agent 'had no problems with it'
The question without context is what will give rise doubts.
Particularly as you seem to want to change the question after getting the first two replies that definitely answered the question.

If you keep posting and hoping to get a different opinion, then it appears that you disagree with the replies given.

Thanks (3)
Replying to Helen B:
DougScott
By Dougscott
17th May 2024 12:21

[quote=Helen B]

I have been an accountant for many years

Hard to believe based on your knowledge! This is basic stuff.

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By SXGuy
17th May 2024 09:45

Struggling to believe that the client doesnt have at least 1 piece of qualifying expenditure no matter how small which would enable them to claim the property income allowance.

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By Helen B
17th May 2024 09:57

So the FHL business has its own income and expenses as a usual business would have, all I am considering is whether the business could claim £1000 as cleaning/laundry costs that could fall under a trading allowance of the owner - casual/misc income up to £1000 per year without going on the tax return.

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Replying to Helen B:
Danny Kent
By Viciuno
17th May 2024 10:19

The simple answer is no.

The trading allowance cannot be offset against income which is derived from a connected company/business/partnership. The detailed exemptions are in the legislation.

If the owner wishes to claim costs for these expenses they should keep a detailed record of the actual costs incurred (cleaning supplies, electricity used). They cannot charge for their time.

Thanks (2)
Replying to Helen B:
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By richard thomas
17th May 2024 10:23

In which case your question is all the more bizarre. As has already been stated there is no separation between "the owner" and the "business" (unless you've failed to mention that the FHL business is actually carried on by a company and the "owner" is the owner of the company not of the business - in which case see Viciuno's answer).

Thanks (5)
Replying to Helen B:
Stepurhan
By stepurhan
17th May 2024 10:46

Helen B wrote:

So the FHL business has its own income and expenses as a usual business would have, all I am considering is whether the business could claim £1000 as cleaning/laundry costs that could fall under a trading allowance of the owner - casual/misc income up to £1000 per year without going on the tax return.

The FHL and the putative "self-employment" are the same individual. An individual cannot bill themselves for work. This is a pretty fundamental principle of personal tax, so querying whether you should be dealing with this is not unreasonable.

So the fall-back is what actual laundry/cleaning costs are being incurred (excluding the FHL owner's labour)? Identifiable costs of doing the cleaning (cleaning materials, etc) would be claimable.

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Replying to Helen B:
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By Paul Crowley
17th May 2024 17:12

If it did then there is the issue of not notifying HMRC of that source of income.

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By Paul Crowley
17th May 2024 10:38

Absolutely no
Contrived artificial arrangements

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DougScott
By Dougscott
18th May 2024 08:44

In fact if you click on the ? on the tax return that sits next to the trading allowance claim box I'm pretty sure it used to set out that you couldn't claim this allowance if the income came from a connected person or company.

It's possible that if your client physically paid £1000 to a non-connected person (which I think could include an unmarried partner for instance) then that non-connected person could claim the allowance.

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