Income tax- service charge & major works charge

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    Income tax- service charge & major works charge

    Hi all,
    Apologies for asking something which is probably very basic. I am not too good with numbers and finding it hard to understand all of the terminology.
    I am looking to rent out my one bedroom property. I know I can offset/reduce the income tax amount by some of my mortgage interest but my question is about the monthly service charge (for day to day running of the building, caretaker, lift running etc) and monthly major works charge (to repoint the whole buildings roof -I have to pay a monthly amount over three years).
    The two charges combined are £318 a month, would they be seen as running costs so are not taxable?

    Many thanks
    Anna

    #2
    They are both service charges and both allowable.

    They are are at the luxury end of the scale and I'm surprised there are many one bedroom flats in luxury blocks. I believe the average figure, for London, is more like £150 a month.

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      #3
      It is expensive, £150 for the ongoing service change which I knew about when I bought the flat and £168 for the major works to fix the roof- which was not a nice surprise.
      Great thank you for helping me, I really appreciate it.

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        #4
        yep as above, service charge fully deductible as long as you do not pass cost on to tenants. note this should also include buildings insurance

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          #5
          Fab, I shall do that. Thank you so much for your help

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            #6
            The current tax year starts from 6th April 2019 and runs through to end on 5th April 2020 and you will be expected to complete a tax return for your BTL rental profit for 2019 - 2020.

            The rental profit ( or loss ) = 12 months rental income minus the 12 months allowable expenses ( letting agent fees ,repairs, insurance ground rent and service charge etc ) .

            The current year SATR (Self Assessment Tax Return) for reporting BTL rental income for 2018-2019 is SA105 ( 2019 ) and SA105 Notes (2019) which can be downloaded from HMRC website.

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              #7
              Great, that all makes sense Thank you Gordon

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