Furnished Holiday Lets (FHL) Accountants

Fusion Accountants specialises in helping Landlords that let out or want to let out properties under the Furnished Holiday Lettings scheme and benefit from tax advantages from it.

What is a
Furnished Holiday Letting (FHL)?

A property that is rented out on a short term basis (most commonly to tourists or holiday makers), i.e. let for less than 31 consecutive days can be classified as a Furnished Holiday Let (FHL).
There are many benefits for such properties that qualify as an FHL compared to properties that are rented out on residential basis on a long term basis.

Qualification Criteria

To qualify as a Furnished Holiday letting property, a number of conditions must be met such as:

Location

The property must be situated in the UK or in the European Economic Area (EEA).

Availability condition

The property must be available for commercial lettings as a holiday accommodation to the public for at least 210 days (30 weeks) of the tax year.

Letting Condition

Out of the 210 days, the property must be let out for at least 105 (15 weeks) days as holiday accommodation. Note that this test can also be met by making an election to average period of occupation of any or all of the furnished holiday lettings owned by the tax payer.
Any longer term lets (more than 31 days) to friends or family is NOT COUNTED towards the 105 days as all lets must be commercially let (i.e. there must be a INTENTION to make profit through commercial let).
In addition the FHL must be furnished sufficiently for a normal occupation.

Benefits

There are lots of tax advantages for Furnished Holiday lettings such as:

Offset Losses from FHL personal income tax

This is particularly useful where FHL properties are run as Sole Trader business rather than through a Limited Company. If you have incurred significant losses kitting up your property then these losses can be offset against other personal income to reduce to you tax.

Claim Capital Gain Tax reliefs:

Business Asset Rollover Relief

The property must be available for commercial lettings as a holiday accommodation to the public for at least 210 days (30 weeks) of the tax year.

Fhl benefits
Entrepreneurs Relief

Perhaps one of the most useful and commonly used relief. The Entrepreneurs relief allows the business owner to pay a flat 10% tax on the chargeable Capital Gains as compared to Capital Gains tax of up to 28% that may applicable on non FHL properties.

Relief for Gifts of Business Assets

If you gift your business assets to anyone then Gift Hold over relief can be claimed. This mean don’t have to pay the Capital Gains Tax when giving away the property, instead the tax is deferred until the property is subsequently sold by the person receiving the gift.

Claim Capital allowances on Plant and Machinery

Unlike residential rental properties that no longer attract Capital allowances, FHL properties allow you Capital Allowances for the cost incurred to furnish the property. This helps further reduce your taxable profits and hence reduce your tax bill.

Earning are counted for Pension Purpose

No Council Tax

Instead of paying Council Tax, as your property will now be considered a Business property, it will instead incur Business Rates. Given the general location of the FHL properties, you will almost always end up paying less in Business rates than council tax.
And many more benefits…..

How we help?

Fusion Accountants provides a fully comprehensive service to its clients with Furnished Holiday letting businesses from initial review, eligibility criteria to tax planning and calculation of tax (including submissions).
Our service comes with;

  • Dedicated Accountant with specialism in FHL property to help you with assessment and planning
  • Monthly / Yearly accounts to help you understand you business financial performance and position
  • Tax Planning and Advice throughout the year to ensure you make the most of the tax releifs available to help minimise tax
  • Award winning accounting software to help reduce your admin burden of managing you FHL property portfolio
  • Personal Tax Returns calculation & submission
  • Comprehensive Limited Company accounting service (if you are running your FHL through Ltd Company)

Need Help with your accounting and tax?

Speak to one of our Specialist!

Corporation tax

Meet Our FHL Landlord SPECIALIST

Jamal Ashraf

Jamal Ashraf

Accountant

Jamal is one of our AAT qualified seasoned bookkeepers with over 3 years experience working with Ltd companies and sole traders. Jamal Joined our firm in 2018 starting with company secretarial duties. He has developed his skills and now prepares and submits VAT returns, company tax returns, personal tax returns and payroll for our clients. He has the proficiency to work with a range of accounting software including but not limited to: Quickbooks online, Freeagent and Xero.

Outside of work he enjoys nature walks with his dog and maintaining a fit and healthy lifestyle while also studying towards his CTA qualification.

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