I keep going round in circles on this one .. sorry!
Client has a large house and rents out a self contained flat which is connected to and part of the house for about 250 nights a year.
For 17/18 the gross rental income from this was just over 20,000. The direct costs were 5,000 and reasonably apportioned joint costs (council tax, electricity, insurance and mortgage) were 2,000. So total actual costs were 7,000.
Client would be slightly better off using rent a room to get a deduction of 7,500 however I'm reasonably I've read that if a rental business meets the criteria for a FHL it has to be treated as such .. or is it an option that the tax payer can choose?