In the past we agreed with a client that the income from a property which simply rented out furnished rooms with no services over an above changeover would be classed as FHL's for the purposes of declaring the income on the tax return. The rooms are advertised on the like of booking.com / expedia etc.
Now of course, from the perspective of SEISS, this is not ideal as they are unable to claim the grant as this is not self-employment income. At the time they were more than happy avoiding class 4 NI however!
Client now contests the original classification as FHL. My questions are:
- Can anyone point me in the direction of a resource to help assess the classification (FHL v Hotel / Band B v investment)
- In hindsight, I wonder if the limited service element would even reach the threshold of a FHL and not simple be assessed as investment income?
- Would there be any mileage in trying to reclassify the income with HMRC? I am highly doubtful and regardless would not be happy changing the facts to suit the current situation
If it makes any difference the building was operated as a B and B previously but of course provided the usual services associated with a B and B