Registering With Inland Rev - Rental Income

toby_puppy

Hi - just started renting out our flat - is there a way to register online with the inland revenue - I've had a look on the site, but can't find a form.
We are on PAYE, so don't really want to register as self employed but want to declare the rent received.
thanks.

sarflee

Not as far as I'm aware. You have to write in or phone.

fengirl_2

You just call and say you want to self assess as you have rental income.

kitty1801

Hi - if this is your first notification to HMRC of property income you will need to write in detailing your expected income and expenses for the property. They will then deicde whether a tax return is required. In a lot of cases, they can just take any additional tax due through your employment and save you filling out a tax return.

spilly1

HMRC will require you to do a tax return if you have any other source of income that is not totally straightforward. So you will need to tell them about the rental income, and then fill out a tax return, adding in the income and expenses for the property rented. There are different rules as to what expenses you can claim, depends on whether unfurnished/length of let etc

kitty1801

spilly1 wrote: »

HMRC will require you to do a tax return if you have any other source of income that is not totally straightforward.

This is not entirely true. If you check the criteria at http://www.hmrc.gov.uk/sa/need-tax-return.htm it's not always necessary to complete a tax return to declare income from property. See the specific guidance below:

people who get rent or income from land and property in the UK (but if you are an employee and this income is less than £2,500 a year a tax return may not be necessary)

So if the gross income from property is less than £10,000 pa AND the net income (after expenses) is less than £2,500 pa then you will not need to complete a return. You will however, need to notify them in writing initially (do this ASAP) and they will probably send you a tax review form (P810) every 2-3 years.

Stuart_Bellamy

Although it may not be due I would recommend that you deal with your rental income through self-assessment rather than through your PAYE tax code.

Firstly it will always be difficult to have the correct figure included in your tax code so you will end up over/under paying tax on the rental each year.

Secondly, if you do have to pay tax because of a rental profit self-assessment will give you a slight cashflow advantage and you only pay on 31 Jan after the end of the tax year.

You may want to get an accountant to do the return for you to make sure the all allowable expenses are claimed.

kitty1801

While I do understand the points Stuart has made above, the fact remains that HMRC may not ask you to complete a tax return and unless they ask for one, you really shouldn't be completing one.

They have to decide whether a self assessment record needs to be set up and if they don't, you won't be given a UTR which means you can't file online. If you submit an 'unsolicited' paper tax return (due by 31 October following the tax year end) you may end up in a position like thousands of others where the processing of paper returns takes a minimum of 8 months - an unsolicited return can take substantially longer to process through the system and even then they might send it back unprocessed as self assessment criteria is not met.

This is all by the by - ultimately it is not your choice whether or not you complete a tax return but rather, governed by HMRC criteria. Best thing to do is as I said, write to them ASAP detailing expected income.

An accountant can be costly and in the vast majority of property letting cases, not necessary. If you are only letting one property and it is not a mansion it should be straightforward. See the notes for 2007-08 at http://www.hmrc.gov.uk/worksheets/sa105notes.pdf

MoneyLosingExpert_2

kitty1801 wrote: »

While I do understand the points Stuart has made above, the fact remains that HMRC may not ask you to complete a tax return and unless they ask for one, you really shouldn't be completing one.

They have to decide whether a self assessment record needs to be set up and if they don't, you won't be given a UTR which means you can't file online. If you submit an 'unsolicited' paper tax return (due by 31 October following the tax year end) you may end up in a position like thousands of others where the processing of paper returns takes a minimum of 8 months - an unsolicited return can take substantially longer to process through the system and even then they might send it back unprocessed as self assessment criteria is not met.

This is all by the by - ultimately it is not your choice whether or not you complete a tax return but rather, governed by HMRC criteria. Best thing to do is as I said, write to them ASAP detailing expected income.

An accountant can be costly and in the vast majority of property letting cases, not necessary. If you are only letting one property and it is not a mansion it should be straightforward. See the notes for 2007-08 at http://www.hmrc.gov.uk/worksheets/sa105notes.pdf

Can I just check that the only HMRC form you need to fill in is a Self-Assesment? I am looking to rent in the summer and will just about break even on it I think, but I already fill in SA form as I'm a director of a company (that has nothing to do with renting). Do you know if I'd still have to notify them?

kitty1801

MoneyLosingExpert wrote: »

Can I just check that the only HMRC form you need to fill in is a Self-Assesment? I am looking to rent in the summer and will just about break even on it I think, but I already fill in SA form as I'm a director of a company (that has nothing to do with renting). Do you know if I'd still have to notify them?

Yes, you should always notify HMRC of any additional untaxed income sources ASAP - as you are completing tax returns already they will probably be happy with you declaring this additional income through your self assessment tax return.