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Renewable heat incentive payments and taking them into account for tax purposes
A husband and wife run a bed and breakfast business from a large country house that they occupy as their home. The house is owned in the husband’s sole name. The business is not registered for VAT because its turnover is below the registration threshold.
The boiler that heats the house was replaced recently and the installation qualifies for annual payments under the renewable heat incentive (RHI) scheme. Must RHI payments be taken into account when determining business turnover for the purposes of VAT registration?
For income tax purposes 35% of the running costs attributable to the house are claimed as a business expense based on the number of rooms used for business purposes. Should the whole of the RHI payments be treated as business income or only 35% of them?
Query 18 402– Boilerman
Reply from Liz Jones Davisons
When considering whether the business will...
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