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July Questions and Answers
Newsletter issue - July 2015.
Q. I personally own a number of buy-to-let residential properties. My son will attend a new school from September and it would be convenient for the family to live in one of those let properties. Can the cost of repairs made to that property while we are living there be claimed as expenses against the rental income from the whole property portfolio?
A. Any expenditure on repairing the property will be incurred for the benefit of you and your family while you live there, so it can't be deducted from the profits of your property letting business. Even if the property is let out again after your family has moved out, the repairs done while the family were there have a non-business purpose. It would be better to do the repairs while the property is occupied by a tenant or after your family has moved out.
Q. My company runs a record label specialising in club music. We used to produce the music on CDs, but now almost everyone buys music as a download or via a streaming service. I have a large number of CDs in stock which I am unlikely to ever sell. How should I value that stock in my accounts?
A. The acceptable method of valuing stock is: "the lower of cost and net realisable value". As you think it is unlikely that the stock will be sold, it has a nil realisable value, so you can value it at nil in your accounts.
Q. I am the director of my own company, which has kindly purchased new spectacles for me for £269. These include lenses specially formatted for the design work I do on screen. Do I need to include the cost of the glasses on the form P11D for the year?
A. As you need the glasses for your work using a computer the company can pay for the cost, and there is no taxable benefit for you.
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