I was speaking last week to a guy who works closely with tax investigations, The number one industry experiencing real headaches with investigations at the moment is property – specifically landlords.
Many people who owned and rented out properties but hadn’t reported this via self-assessment tax returns suddenly found HMRC letters on their doormat ‘inviting’ them to voluntarily disclose what had happened over the past few years.
And for existing landlords who are reporting everything it’s even more important to make sure that you’re getting things right, and that your property tax is being reported and calculated correctly.
A common source of confusion is what you can and can’t claim as an expense against the rental income. To help you out, here’s a quick list of what’s allowed:
- Council tax and utility bills (gas, water, electricity)
- General maintenance and repairs (but big stuff e.g. extensions, need carefully looking at)
- Mortgage/loan interest (but not the capital repayment element of any payments)
- Letting agent fees
- Accountancy fees
- Rents and ground rents
- Service charges
- Insurance (make sure your insurance policy is a proper landlord’s policy and that your insurer is fully aware of the rental position – massive headaches could occur otherwise)
- Advertising fees (for new tenants)
- Any other costs e.g. mileage or travel, that can be specifically linked to the rental activity
Obviously, as always, keep good records and all necessary paperwork.
If you’re a landlord and want to make sure you’ve got your affairs in order, feel free to get in touch and we can talk over how we can help you. Property tax – get it sorted.