Tax returns for landlords depend on the profit and the personal circumstances of the individual. Certainly, there are times that no tax return needs to be completed for rental income ...
Tax returns for landlords need to be filed depending on gross rental income!
HMRC says that if you have taxable profits from your rental property, then you much contact them to declare it. The deadline for this is the 5th of October after the end of the tax year that the taxable rental profits arise.
However, those with very small amounts of profit can choose between filing a tax return or getting their PAYE code adjusted accordingly!
When rental income is greater than £10,000 before allowable expenses, then HMRC will usually ask the landlord to file a tax return. Below this limit then a PAYE code adjustment can be made. However, if you do get a tax return from HMRC, then it has to be filled in and returned.
You can get up to £1,000 a year in tax-free allowances for property income. This means that if your annual gross property income is £1,000 or less, you don't have to tell HMRC or declare this income on a tax return. Of course, 'Gross Income' means the total amount you receive before any allowances or expenses are taken out and you must keep records of this income.
"You can use the tax-free allowance instead of deducting any expenses or other allowances!"
If your expenses are more than £1,000, you should claim expenses rather than use the allowance, and finally, if you own a property with someone else, you're each eligible for the £1,000 allowance against your own share of the gross rental income.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about tax returns for landlords, it may be a great idea to give me a call on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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