There are specific tax rules for buy-to-let landlords. A property accountant with industry knowledge will be able to offer an invaluable service.
The costs of a variety of charges, including ground rent, service charges (if sub-letting or leasing), tax, and utility bills such as gas and electricity can be claimed back. If tenants are responsible for paying their utility bills, then this cost can be claimed back only when the property is empty. A Landlord Accountant can advise the perfect way to apportion the cost of utilities to claim.
The contact data for Owners and letting agents who rent property online should have been exchanged to HMRC in an annual report from the platform provider of the service they use.
Your rental income will be taxed at 0% if your income is below the £ 12,570 basic rate threshold. Rent income above £ 12,570 or below the higher rate threshold at £ 50,270 will be subject to 20% tax. Rent income above £50,270 or below the additional rate threshold of £150,000 will be subject to 40% tax. Speak with our Tax Accountant for Landlord to do effective tax planning.
For the repair of broken fixtures like sinks, toilets, and baths, you can apply for an expenses deduction claim under Landlord Accounting reports. These repairs are considered repairs to the building. However, they must be comparable replacements.
You can claim like to like replacement of furnishings, such as beds, televisions and carpets if the property(s) you rent out is fully furnished.
You can claim for office costs, including broadband and phone bills. However, only the amount you use for rental business is allowed. The costs of office equipment, such as printers, telephones, and computers, as well as consumables like paper and printer ink, can be claimed. You can inform your Tax accountant for Landlord to best explain any individual expenses type.
Your National Insurance number is used to register you in the electoral roll. HMRC can easily find information about your property through the electoral register. Many landlords hire estate agents to manage their properties.
HMRC can claim 20 years of tax payments if it suspects that a landlord is deliberately avoiding taxes. They may also impose penalties up to the full value of any unpaid taxes as well as the underpaid tax.
To reduce their tax, landlords can no longer deduct mortgage interest from rental income. Now, you’ll receive a tax credit that is based on 20% of the mortgage interest component. This rule change could result in you paying more tax than you would have previously.
If you earn rental income from letting a residential house property, you can claim a deduction of certain rental expenses in your tax return. The expenses could include mortgage interest, Council Tax (property tax), and operating expenses such as repairs and office costs.
A portion of running costs for a property-related business that is run from a home office is permitted. The claim could cover lighting, heating, repairs, maintenance, insurance, and broadband. The landlord may be responsible for any damage to the contents of a rental property.