Archive for Downsizer For an ethical approach to consumption
|
Moniar
|
Bed and breakfast - tax and rates etcWe are on the move to West Wales and a number of properties we are looking at have letting annexes or cottages. One is a current B and B plus 2 adjoining letting units.
I have gathered that in rural areas such as Ceredigion there is some sort of council tax banding discount or rural rates relief for small businesses - anyone have any experience of this within a B and B context?
A large number of B and Bs appear to just have 2 rooms available - is there some cut off threshold whereby there is a tax advantage in keeping the number of rooms to two or less?
Also if you are living in the same building is there a fixed % of repairs and maintenance that you can put against the B and B business.
If you have a mortgage does it have to be a commerical business one or is there a way of financing it through a normal residential mortgage.
Sorry for all the questions - just need the basic info to see how the business model works so we can determine if its worthwhile running a B and B in peak season.
thanks
|
Bees Knees
|
Always ask and check info. given twice!Hello Moniar,
Shell here at the Bees Knees Guest House in Poole. Before I answer your questions, please can I give you some valid advice. Check with your local Council Rates dept. The Valuation Office and the Deeds of the property you might be buying. Get your facts from the authority concerned not from heresay as all councils and authorities have different policies on the questions you asked.
Research and do you home work. Is it work it! YES DEFINATELY.
1) we get 25% off our business rates as a small business. If you live on the premises the council will give you a reduction in your council tax but it depends on the rateable value of your property which you need to find out from the local VOA. We have three bedrooms and one room in the house is completely for our use only. We were not eligable for council tax releif.
2)There is no Threshold of number of rooms but be aware that with larger numbers of letting rooms, comes larger responsabilities. Mainly Fire regulations and health and safety.
We had a very helpful fire safety officer from our local fire department, come round and do a check on us. It was very beneficial to us as we found that a lot of the fire safety rules and regs did not apply to us. ie. we were told that if guests had to traverse a flight of stairs in a fire, you have to make sure that every step has sufficient emergency lighting for each step. We have a street light right outside our house and the front door is glazed with windows either side. The fire officer said that because we had sufficient borrowed light we did not have to provide emergency lighting on every step. Please make sure you contact the local fire safety officer or look on the net as there is no such thing as a fire safety certificate, you have to access your own fire safety now so please do find out first.
3) you can offset your repairs and maintenance costs on your tax bill. keep every receipt for repairs. Also when you are setting up the business, you can claim back the tax on your set up costs. Talk to an accountant. Ours got us £3K back last year.
4) Speak to your mortgage adviser or current lender. As this is our house and the fact that though we are running a business from home, we did not have to get a commercial mortgage. Further aided by the fact that we now only have a very small amount of money to pay off on the property now. You could decide to not declare your intentions to your current lender, but its not worth the risk especially if you change your mortgage three years in.
Check the deeds of the property you are buying, some deeds do not allow any form of business to be carried out on the premises.
Why we are really enjoying what we do now?
Mainly because we are not in control of our lives. Both of us had really stressful jobs and were getting to the stage in our lives that we were fed up of being an employee.
We love being the masters of our own destiny. We love the freedom of having days off when everyone else is slaving away over a hot desk and though not this recession is affecting our income (we're down about 20% on last year) however, we are still bringing in enough to cover our overheads. and of course when we have days with no guests in we make sure we do something with the day as this job is a 20-4 -7 job when youre running full tilt.
We love meeting people and hearing what they have to say and what they do. because we provide a service which people have expectations of, we go out of our way to makesure people really enjoy their stay the biggest reward is readiing the reviews and ratings we get on Trip Advisor. It really makes you feel humble and really does give you a buzz to know that we were responsible for that person enjoying their trip to Poole.
Hope this helps
shell
|
Moniar
|
Hi Shell
Thanks very much for the tips, and yes I do need to check on the ratable value and the local polices on the various tax/permission aspects. Have started looking at some inland revenue information pages, and was aware of the fire risk changes.
Good to hear that you have enjoyed the change and get a buzz out of the new career. I dont think we would be running the B and B side fulltime - just peak season, but the letting units would probably be run full time as less work with them on long lets, and I'm qualified in property management/surveying so know the ropes on that side.
Just need to work out all aspects of the B and B side to see if its worth the extra £ being asked for the particular property in question. Dont want to be paying for business if we wont be continuing with that element of it - at least in the short term - but it will be nice to have the option of increasing income in the future if my fulltime work ceases or I go part time 
If we proceed to consider the property more seriously I will be asking for the accounts and running them past our accountant.
cheers
|
|