Small yard letting question (need advice)

[Samsontheskewbald]

Hi all,

There is a small yard possibly comming up for rent. I’m thinking of maybe taking it on if enough of the people i like would like to split it!

My question is.. i’d be letting the property, but then subletting it to the others. If i was to do this and make a slight profit could you tell me everything I would need to do? (And if there is a cost)

ie, insurance, do i need to register self employed / as a business ect?

Don’t want to accidentally do anything illegal or without propper thought and full knowledge.
Thank you so much in advance!!

 

[rextherobber]

You would be running a business, so would have to register as a sole trader for tax purposes. You would need liability insurance as a minimum.

 

[rextherobber]

Didn't mean to post that then! Just wanted to say I'm sure there,are many yard owners on here who will give you the advice you need. I have a couple if empty stables which are staying that way, as the trouble outweighs the benefits for me, but wish you luck, could be fun!

 

[Winters100]

You would also need to take advice about the lease - what you are allowed to do as well as what you are obligated to do. Pay particular attention to the repair obligations and the condition the property should be handed back in.

 

[The Xmas Furry]

There are 3 let small yards near me, each and everyone has a clause about sub-letting (liveries) which is forbidden, they all take 2 months rent as deposit as well as the moving in rent (so that's 3 months up front). 2 stipulate a max amount of horses to be kept there (no more than 1 per stable) and all have maintenance as well as repair clauses. (Even regular muck heap removal and hedge cutting etc). These days they have annual inspections, but during the 1st year they had 3 monthly checks.

Sounds very picky, but works very well and all 3 places are well looked after with long term tenants.

 

[Orangehorse]

You have got to think through all the "what ifs." It could work very well, but you have to face up to what if the worst happened.

It may not be allowed by the owner, if it is I think you would need some sort of insurance to cover yourself. You could contact the BHS for advice.

 

[Samsontheskewbald]

You would be running a business, so would have to register as a sole trader for tax purposes. You would need liability insurance as a minimum.

Is sole trader best or LTD?

 

[Samsontheskewbald]

You have got to think through all the "what ifs." It could work very well, but you have to face up to what if the worst happened.

It may not be allowed by the owner, if it is I think you would need some sort of insurance to cover yourself. You could contact the BHS for advice.

Ah, yes, never thought about asking the Bhs!

 

[rextherobber]

Is sole trader best or LTD?

My accountant did mine ( not horse related business) that's what they went for...Sorry, not very helpful, like you, I was keen to avoid doing anything illegal, so pay those who know!

 

[teapot]

You'll need to check what planning permission the yard has. Anything other than grazing (no riding) requires business use.

 

[Lipglosspukka]

Every rental arrangement I have had has stipulated that I cannot sublet. Probably worth checking this out first before getting your hopes up.

 

[ownedbyaconnie]

Is sole trader best or LTD?

Both are good for different reasons. For tax efficiency there is a certain level of income (your entire income so including employment if you are employed also) where being a ltd company is better because of the lower corporation tax rate vs 40/45% income tax rate for individuals. You’d then extract the profits as dividends which are taxed at a lower rate than non savings income plus have a £2,000 tax free allowance on top of your personal allowance. You’d also not have to pay NIC. But ltd companies require more admin which costs money. Ltd companies also have limited liability so your personal assets would be safe if the company went bankrupt whereas as a sole trader you personally are liable.

 

[Annagain]

You might find it easier to take it on as a shared tenancy with your friends if the lease allows. But then you have the issue of what happens if one of you wants to leave but the other doesn't. It would have to be someone you really trust and get on with. My best friend and I did this and it worked well. We had a joint account and the rent came out of it by direct debit. We'd pay a bit more in to cover repairs and haylage for the winter. The arrangement was great but the place wasn't wonderful. The grazing was poor (it was in a very narrow valley and got little sun so the grass just didn't grow) it flooded once or twice and we decided we needed somewhere with more facilities (we just had a field, stables and hay barn) so we moved on. Luckily, we both wanted to move and our preferred (current) yard had the three spaces we needed. It could have been tricky if it was just one of us or we couldn't find somewhere for all the horses.

 

[Christmascinnamoncookie]

Consider rules before you even think about it.
Muck heap removal?
Worming regime?
Do you buy in the hay/straw?

 

[PeterNatt]

... and don't forget business rates.