Tax Relief On Essential Repairs

[ilovebrie]

I am asking this on behalf of a friend who is fairly new to online self assessment (the second time he has done this). He has a dedicated office in his home and had some essential roof repairs done during the tax year 2012-13, but did not know that he might be able to offset these against his very modest self-employed income.
He has asked me (1) to find out if he can claim for these in his current SA return, and (2) if so, what proportion of them.
He is going around in circles, cannot find any information on the HMRC website and has tried without success to get through to the helpline. I hope someone on AB can help.
The total cost of repairs was approximately £2400.
Many thanks

[woofgang]

I would phone the tax office and ask!

[buildersmate]

He needs to be very careful before deciding to do this.
1) Having a dedicated office within one's home lays you open to having your home being declared dual use for council tax and business rates. It means you pay a slightly smaller council tax but a whole lot of business rates.
2) The implication of 1) above is that when he sells, a proportion of any capital gain on the property is not fully exempt from CGT, because It is not all his principal private residence.
For a potential saving in tax of £480 (20% of the £2400), I don't reckon it is worth it.
Besides ALL of the sum would have had to be a repair requirement on the roof of the business office, and this sounds like the cost of the whole roof works including his residential dwelling.

[ilovebrie]

Thank you for this very clear explanation, Buildersmate. It is really helpful.

[buildersmate]

There is a whole chapter of guidance, including worked examples, on this subject in the HMRC manual staring here:
http://www.hmrc.gov.uk/manuals/bimmanual/bim47800.htm

One of the things he can do without any questions being raised by HMRC is to claim £104 per year (£2 per week) as a flat rate contribution towards household maintenance and utility costs, without receipts or any other evidence.

[ilovebrie]

Thank you again, Buildersmate. I have passed all your information on to him. I'm just happy I am PAYE (I never thought I would say that)!