Do I pay tax on rent received for 1st-5th April 08 as part of 07/08 tax year?

miss_jane_3

Hello,

Just a quick question here, I'm filling in my tax return but I'm unsure about what to do for the first five days of April.

My tenent paid me just before the start of the month for the upcoming month so received a payment on around 28th March. So do I split the rent and my expenses over the month (ie work out a 5/31 share of the rent received then the same for my mortgage interest and insurance and stuff) and add that on to the 07/08 tax year? Or do I just pay it with next year's tax? All my expenses come out of my account at the start of the month.

I hope I'm making sense here, I'm not sure I understand myself!

ceeforcat

No - the HMRC accepted principle is to accept as if started in new tax year - otherwise you would have the same problem every year! Next year you should declare your income from 1st April 2008 to 31st March 2009.

Cook_County

The accrual method of accounting is the only permissable method for rental income/expenses. So you would always report based on amounts receivable whether or not paid.