I did 3 holiday caravans and a chalet and I have never paid for any tax to date on the income I receive out of letting them out. I get regular free holidays at a choice of two locations on the beautiful Welsh coastline as well as tax man actually paid me money back last year.
To say your special tax concessions you only need to follow 3 uncomplicated rules:
1 Make your caravan available to let for at least (140 days) 20 weeks of the year
2 Your caravan must be let for at least (70 days) 10 weeks in
3 It must not be let to the same person exceeding 31 days during 7 months of the year.
Carry out these 3 simple rules and like me you can have free holidays and generous tax rewards. Prove to the exact tax man that you are a business and you can claim a deduction in tax from your income called a ‘Capital Allowance’. You possibly can claim back 100% of the cost of buying the caravan nearly £50, 000 from your rental income in the first year or so. In the second year you can claim 20%. This is because your individual caravan is an asset which depreciates in value eventually. Unlike a permanent structure such as a house or chiseled.
When renting out caravans you get the best rental salary from the more basic, comfortable well equipped caravans. Popular a luxury caravan you will not get a proportionately higher rental available for you outlay. Consequently, the best thing to do is buy second hand caravans privately from owners direct. You will get the best deal with the least outlay this way.
If you buy a caravan for £20, 000 and earn £5, 000 in rental profits in the first year you will not pay any tax in this particular income. What is even more important is that you are left with a £15, 000 capital allowance which you can offset against your many other earnings for the year. This means that you can earn £20, 000 in such a year without paying any tax. In the next year you get one other £4, 000 in tax relief. Click here
But that is not all that you can decorate upgrade and buy things for your caravan because you are a business you can deduct this from your letting money. In this way you can buy your luxury caravan, decorate, upgrade them and kit it out with TV, freezer, bedding or anything else and deduct this back from your letting income. Then you definitely have more tax relief to offset on any other source of income for that year.
You also get tax relief on any sort of loan repayments for a caravan purchase. Furthermore, as you online business there are many more things you can claim back on such as a per cent of your phone bill, internet bills, heating, lighting, laptop etc . The only thing I would say is get a good accountant and you ought to not pay any tax as long as you keep investing advertising and then reinvesting.
I lost my job 5 in the past and invested a caravan with my savings. Our kids tried to stop me saying I would need the money. Consequently I have invested in another caravan every year and have not yet paid out any tax on my income. I get free holiday season all year round for myself, my family and friends and I exclusively work part time renting and maintaining the caravans. The loss of my job was the best thing that ever happened opinion.