Received rent for 2017 -2018 in tax year 2017 - 2018

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    Received rent for 2017 -2018 in tax year 2017 - 2018

    I have just received a very late rent payment which was due from for last Jan, Feb, March of 2017. Am I right in saying I put them in my tax return for 2016 - 2017 if I have not filed it yet ?

    #2
    If you are using the accrual basis you account for the rent when you earned it, so 2016-2017

    If you are using the cash basis then you need to account for the rent whenever you actually receive it, so 2017-2018.

    Comment


      #3
      Originally posted by jjlandlord View Post
      If you are using the accrual basis you account for the rent when you earned it, so 2016-2017

      If you are using the cash basis then you need to account for the rent whenever you actually receive it, so 2017-2018.
      I am using the accurals basis. Can I just confirm something as a example.

      Say you had only one property rented at 500 pcm and for explanatory terms had no expenses. The total property rent for year is £6000.

      If a tenant only made 11 payments in the 12 months and missed a month. Do you declare £6000 or £5500 ?

      Comment


        #4
        You declare £6000.

        In the accrual basis what matters is that income is earned. When the tenancy has run a month you have earned one month rent whether it has actually been paid or not.

        Comment


          #5
          Originally posted by jjlandlord View Post
          You declare £6000.

          In the accrual basis what matters is that income is earned. When the tenancy has run a month you have earned one month rent whether it has actually been paid or not.
          What would happen if you declared it in that tax year, paid the tax on it. Then the tenant left and never gave you it ?

          Comment


            #6
            When you conclude that a debt is not recoverable you can write it off. I.e. deduct it from the income of a following year.

            Comment


              #7
              Originally posted by jjlandlord View Post
              When you conclude that a debt is not recoverable you can write it off. I.e. deduct it from the income of a following year.
              Just reading up on the Cash Basis . I thought this was for rental income of under £15,000 which I had a topic up years ago when my rental income went over this.

              If I am reading correctly this is now for income under £150,00 or the vat threshold and this has been extended so landlord can use it.

              From what I am reading it is from 2017 - 2018 .

              Do you know much about this ?

              Comment

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