Tax first time - a bit late ...

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    Tax first time - a bit late ...

    Hi , I live in England and rented a London property for a year from early March 2017. All 12 months rent were paid up front. I also have a full time job.

    I'm guessing the entire 12 months payment counts towards (2016/2017) because it was made before April 1st 2017?

    I'd like to notify the tax man - I think it should have been by last Oct 2017 so may be at risk or penalties ..

    Should I just quickly notify HMRC now and then work out the figures later?

    Also I'd like to try doing this without an accountant. Is that a bad idea? [I'm good at maths, hate finance, but I've filled out Self Assesments ok before

    Is there a recommended site that clearly steps through allowable expenses etc or is HMRC site the best?

    #2
    I think you received one month rent in March 2017 ( tax year 2016-2017 ) and 11 months rent during April 2017- Feb 2018 ( tax year 2017-2018).

    So send a letter to notify HMRC and request advice of what tax return is required to be submitted

    Comment


      #3
      When you received the rent depends on whether you are accounting on a cash or accrual basis. All limited companies and larger sole traders need to use accruals. HMRC prefer everyone to use accruals, but allow cash, for very small sole traders, because accruals is a more difficult concept to grasp.

      With accruals, the money is treated as received when it is due, not when it is received, and only one month would actually have become due. With cash, the whole amount has been received.

      If you opt for accruals, you need to be consistent about that. Note, with accruals, if the tenant pays late, the rent is still taxable when they should have paid. If you pay any utilities, you need to split the last bill across the two tax years.

      To avoid penalties, I believe you will need to pay at least the final tax due by the end of today. I assume you will be OK if you pay too much, as it can be adjusted when HMRC make their calculations.

      Comment


        #4
        Thanks - I called HMRC - Calculated approx tax for the month (rent - 100% of interest only mortgage) * my current tax band, put a tenner on top, and paid with my NI number as reference (as UTR is in the post).

        I didnt really buy anothing more until after 1st April (Gardening equipment)

        Comment

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