Quick question

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    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

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