Posting a tax returrn now, purely for a loss, to set against 2015/2016 income?

[JerzyBalowski]

I only became a landlord in April 2014. So was not planning to put in a tax return for 2013/2014.
However, I understand that I can put in service charges and ground rent of the leasehold property down as an expense against rental income in future tax returns.

We paid £800-odd in service charges and rent at the time of completion, before tenant started paying - March 2014.

So, should I put in a tax return before this month's deadline for this £800 as a loss?
So that the £800 loss can be offset against the rental profit from 2014/2015?

[theartfullodger]

You should definitely complete SA so as to carry-forward losses. I believe you can submit SA by deadline then revise later if your figures are slightly uncertain by 31/01/2015 (DON'T leave it that late....)

Suggest you buy & read this book (or similar...)
http://www.amazon.co.uk/How-Save-Pro.../dp/1907302859

Income tax is not the only tax you may pay: There at least 12 & you should also consider & keep records for the others (Council tax, CGT etc etc..)

This may also be helpful
https://online.hmrc.gov.uk/informati...opertyExpenses

Cheers!

Errr.. when you say you only became a landlord in April 2014 when EXACTLY did your first tenancy start?? I may need to revise the above...

[King_Maker]

Unless the tenancy started before 6 April 2014, there is nothing to declare for 2013-14.

Losses are carried forward automatically (although you probably don't have any for 2013-14), there is no need to "claim" them.

[JerzyBalowski]

Just looked into my records. Tenancy actually commenced 15th March 2014.
The 'loss' I am thinking of is the annual service charge and ground rent, that was definitely invoiced and paid in advance pre April 5th 2014.
We used an agent to get the tenant, agent took the 1st months rent from the tenant directly mid March 2014 and subtracted their fees - about 60% of a months rent - from this before remitting the balance to me.
The agent's invoice for all this is dated end of March 2014 but the cash may have hit my account after 5th April.

I assume that my tax booking date will be the Agent's invoice date rather than the cash hits bank date.
Looks like an SA will be in order.
Thanks for the tip about the book. I've been looking at Amazon reviews and may well choose one soon.

[JerzyBalowski]

Just noticed that HMRC's web page says, if rental income is less than £2,500, don't submit a return, call the helpline instead...
Wonder that that means in my situation.

[theartfullodger]

If you don't summit a return you can't carry forward losses

[King_Maker]

If you don't summit a return you can't carry forward losses

That is not correct.

[theartfullodger]

I bow to kingmaker's greater knowledge

[flexy]

I did exactly as you state when I became an accident landlord a couple of months after the the SA deadline.

This was the recommendation given to me by the HMRC helpline.. so yes, you can bring forward losses from a previous year where you had not submitted a return.

[JerzyBalowski]

Called HMRC this morning (they are even open on Saturday) and confirmed I don't have to submit a return due to the rental income being under £2,500. But I did have to give them the details of the 2013-2014 loss over the phone which they'll confirm back in writing. This loss can be applied to the following years profits.

Thanks everyone for the sound advice.

[King_Maker]

I think you may have mis-understood HMRC.

If your rental INCOME is more than £10,000 and the rental PROFIT is more than £2,500, then a SA Tax Return will be required. Otherwise the rental PROFIT can be communicated to HMRC via letter, and tax collected via PAYE.

[JerzyBalowski]

https://www.gov.uk/renting-out-a-property/paying-tax

"Property you personally own
You must report income from property rental of more than £2,500 a year on a Self Assessment tax return.

If it’s less than £2,500 a year, call the Self Assessment Helpline to report it"

From my opening posts, my issue was the first months rent and the annual service charge both being transactions in tax year 2013/2014. A net loss in that tax year but rental turnover was in any case well under £2,500. As I reported in the later post, I phoned HMRC and in response to my detailed explanation they confirmed no tax return would be needed for that year. Reporting it by phone was sufficient. A confirmation from HMRC is in the post to me.

This alternative HMRC link mentions the £10,000 rule:
http://www.hmrc.gov.uk/manuals/sammanual/sam100050.htm

Interesting, as it seems to indicate that if my share of a joint BTL's gross rental income were say, £3000 in a tax year, I could report it by letter and not have to file a self assessment.
But does that apply if the £3000 is in addition to my PAYE income? Maybe another call to HMRC will be needed for that point.