Quick question

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Quick question

    Hi team! Just a quick question. I started renting out my property in February this year. I had total income of 500 after deducting expences. I saw somwhere that I don't have to complete a tax return as my rental income is not above 2500 after deducting rental expencess. Am I right? Apart of that I am with full time salary. Any insight?

    #2
    You have to pay tax on it at your marginal rate regardless of whether you submit a tax return. You might as well submit a tax return in my view as it is a far easier way to declare the income and you will have to do so later anyway.

    Comment


      #3
      You need to contact HMRC and speak to them about paying your tax through paye. AndrewDod is mistaken, you do not also have to complete a self-assessment later.
      https://www.gov.uk/renting-out-a-property/paying-tax

      Comment


        #4
        Originally posted by Jon66 View Post
        You need to contact HMRC and speak to them about paying your tax through paye. AndrewDod is mistaken, you do not also have to complete a self-assessment later.
        https://www.gov.uk/renting-out-a-property/paying-tax
        Why not? If he made £500 profit at the onset of a tenancy in 2 months (when costs are high) annual profits are likely to be 5K per year - but we don't know exactly. Hardly likely to be below the 2500 limit.

        Comment


          #5
          Originally posted by Jarek View Post
          I started renting out my property in February this year. I had total income of 500 after deducting expenses.
          That's not income, that's profit.
          Income is the amount you received before deducting expenses.

          There aren't many rental properties that have rent low enough for the £2,500 per annum threshold.
          I saw somwhere that I don't have to complete a tax return as my rental income is not above 2500 after deducting rental expenses
          When you have a new source of income, you need to advise HMRC (phone call is fine).
          They will decide how you need to report and pay tax.

          They used to pretty much default to self assessment, but PAYE with an annual statement of income and expenses might be an option in your case.

          The deadline for advising HMRC that you received income in 2019/20 tax year has passed (5th October), so I'd do it as soon as you can.

          Without wishing to be too critical, this is a business (albeit a small one) and the time to be considering the tax isn't afterwards and based on something you "saw somewhere".
          They're not normally vindictive, but HMRC can fine you and levy fees for late reporting.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            AndrewDod ah yes, I see what you're thinking, if that's the case you would be correct of course.

            Comment


              #7
              Many thanks for your help!

              I had a chat with HMRC, and yay I don’t have to do self assessment, as I had a profit for last year less than 500£.

              thank you again for your time and help.

              Comment


                #8
                You sure you didn't make a loss that you want to carry forward to reduce tax the next year?

                Buy a book on property taxation. It will save you money. There are more than 10 taxes a landlord may pay.
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment

                Latest Activity

                Collapse

                • Switching mortgage to BTL and tax implications
                  by dotcotton999
                  Evening all,

                  I am currently looking to move house and also have a rental property that has around £200k equity in it.

                  The rental house had consent to let and on a repayment mortgage and has 3 years to go until I can switch deals.

                  I have spoken to a mortgage broker...
                  08-04-2021, 19:52 PM
                • Reply to Switching mortgage to BTL and tax implications
                  by Gordon999
                  D999,

                  The taxman's method of calculating :

                  Capital gain is the Sale Price ( say £200K ) minus Purchase Price ( say £130K ) = £70K capital gain.

                  But buying and selling expenses are allowable and include the conveyancing cost : say £1K plus estate agent'...
                  12-04-2021, 14:17 PM
                • CGT and tax returns
                  by Lots on
                  Hello all, just need some advice re CGT. I have a house which I refurbished entirely, mostly in this financial year and I could start my tax returns on the 6th of April 2021. I spent nearly £30000. New kitchen and bathroom, re doing the garden, new flooring throughout ,total electrical re wire, re...
                  02-04-2021, 09:46 AM
                • Reply to CGT and tax returns
                  by Lots on
                  Thank you for your kind words JP and the tips re using an accountant. Having been taxed at source all my working life this is very useful information. I will look round for an accountant. A friend of mine who is also a landlord as well as having a day job has one, so maybe a personal recommendation...
                  12-04-2021, 10:04 AM
                • Reply to CGT and tax returns
                  by jpkeates
                  Thank you for your work in the NHS!

                  I've found that the first sessions were the most valuable in terms of what could be saved, and the value has diminished slightly and the costs of the returns being done has stayed the same/slightly increased, so it feels like it's less worth it.
                  ...
                  12-04-2021, 08:28 AM
                • spreadsheet
                  by jase222
                  I been looking at spreadsheets to list my expenses and every template I find seems to allocate expenses per house ie 5 houses = 5 separate sheets whereas I just put everything down on one sheet.
                  I would like to know if I have been doing it wrong all these years.
                  ​​​​​​Any help...
                  11-04-2021, 13:53 PM
                • Reply to spreadsheet
                  by jpkeates
                  I use one page of a spreadsheet for all the income and expenses and have other pages which automatically summarise the data property by property.
                  12-04-2021, 08:24 AM
                • Reply to Switching mortgage to BTL and tax implications
                  by jpkeates
                  When you sell the property, you can't retain any of the equity, so that doesn't really make any sense to me.
                  On disposal, the mortgage will end and have to be repaid.

                  The value of the rental property when first let is also a limit to the amount of the loan against which interest can...
                  12-04-2021, 08:22 AM
                • Reply to Switching mortgage to BTL and tax implications
                  by dotcotton999
                  Gordon999 thanks for your reply. In regards to CGT so if I was due to sell a house I could request to remove all the equity before the sale and wouldn’t be subject to CGT... that doesn’t seem right.

                  In regards to switching my mortgage from repayment to and interest only... would I incur...
                  11-04-2021, 19:31 PM
                • Reply to spreadsheet
                  by Gordon999
                  Its good to keep a separate sheet for each property because when you come to sell one house , you may want to show the rental and expenses records for one house to prospective buyers.
                  11-04-2021, 19:08 PM
                Working...
                X