The HMRC’s Self Assessment deadlines every year are significant dates not only for the UK’s 1.5 million landlords but the other 8.5 million people who are required to fill the form in.
And the final dates for the 2013/14 Self Assessment are now looming. Those who prefer to fill in their Self-Assessment tax return using paper and pen have until midnight on the 31st October to complete it and then until the 31st of January next year for online submissions.
Either way, if you’re filling it in yourself then we thought it was time to offer a few essential pointers to claiming the most money and legitimately keeping your tax bill to the minimum.
If you are a landlord and married or in a civil partnership then there is a tax advantage to splitting the income between yourselves, particularly if one of you is a higher rate tax payer and the other is not. Put basically, if you split the income from your rental property 50:50 then you both utilise your £10,000 annual tax allowance and at the end of the day should pay less tax.
Mortgages You can’t claim the repayment part of your monthly mortgage premium but you can claim the interest and remember that, if you’ve re-mortgaged your property during the most recent tax year then the costs including arrangement fees, legal fees and even exit fees (if you’re leaving your old lender) can all be included in your Self Assessment.
Running the tenancy All landlords will appreciate the effort required to fill a property with tenants and manage the tenancy, but not all realise the costs of doing so are tax deductible. This includes the costs of advertising the property, travel expenses to and from your home or office to the property, credit card charges, costs of telephone calls related to the tenancy and the costs of a home office (even if you don’t have one). Also, remember you can claim up to 10% of a property’s income as ‘wear and tear’ and set it against tax if the property is furnished.
Any costs associated with your ownership of the property can also be set against your tax bill including home insurance, ground rent or service charges and, if the property lies empty for any period, the costs of Council Tax and utility bills.
If Self Assessment all sounds too much…
Good news if you earn less than £10,000 a year from your rental property before any allowable expenses are deducted for tax purposes; the government may allow you bow out of Self Assessment entirely, particularly if you have a PAYE day job. So it’s worth calling the government helpline and finding out either way, on 0845 900 0444.