SE and second property Query

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    Hi everyone

    I wondered if anyone could offer me some advise on a complex SE case. It has previously been to UTT tribunal and the claimant has now reapplied so I want to make sure what I am doing is right.

    The basics are he owns 2 properties – one is his home (A) and one is his business adreess (B) where he used to previously run his SE business from.

    He has 2 main companies – one is a photo shop which used to operate from B and one is a consultancy firm, who used to operate from home. He is a director of the second buiness – the consultancy firm and the photo shop he is a sole trader.

    In his last set of SE accounts for the photo shop we allowed the interest only payments of his mortgage for property B as he was running his company from there and the income from this was his.

    The consultancy firm charged teh photo shop for his time and he stated that this was in his accounts for the photo shop. We accepted this as teh consultancy firm was not making any profit. So his only income was the profit from the photo shop.

    This time around he has stated that he is operating the then photo shop (the business that was at property B) from his house. This time the nature of the business has changed to a recruitment and consultancy firm and is earning considerably less than the photo shop did.

    In the business property B is the then consultancy firm which is now a photo shop, which is the business he is a director off. He states that teh photo shop pay him for his time and this is included in his income for the new consultancy firm.

    I was wondering if, now he is not running his personal business from the buisness properrty, if I could now class this as a second property and take into account the valuation and rental income from this.

    I still have more questions to ask about the photo shop and how much remuneration he has received as am not convinced that this will be fair in relation to the amount of profit the photo shop makes but we haven’t asked yet as unsure if we will need more details on his second property.

    Hope its not too confusing but any advise would be great as its giving me a headache!

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