A hairdresser was self employed for several years, renting a chair in a salon.
When lockdown hit, she gave up her rental chair, and refurbished a spare room in her house as a salon, starting working from there in Sept 2020.
She stopped hairdressing altogether in Aug 2021.
Should I claim all the salon conversion costs on the 2020/21 tax return, even though trading stopped less than a year later?
Would the assets such as the chairs and dryers etc just revert to her personally? As they're only worth around £1,500 used, they would fall within the CGT allowance?
You can declare AIA on the 20-21 tax return, but they will have to be accounted for as a balancing payment at market value on cessation in September 2021.
It isn't a capital gain, as you will have claimed tax relief for it in the 20-21 accounts.
Would need more details on the refurb but would imagine these come under capital costs and therefore not tax deductable.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Anything else to consider. A few. Some not all, claiming for a bit of paint and a shelf in one room could result in CGT when sell the house. Worth it? Need to repay seiss?
-- Edited by SoloHans on Tuesday 18th of January 2022 10:34:04 PM
