Declaring tax and a P60

originalmiscellany

Can anyone advise me please?!

I'm a teacher, have a second home (through marriage) which is rented out.

Last year we paid a professional company £300 to do our accounts and log them online etc.
This year we want to save on the amount as you can imagine, I have all paperwork of what we have paid, spent etc on our house, a P60 for April 2011 and the amount of tax credit we were "owed" last year due to extensive improving of the buy-to-let.

Is it simply a case of me logging in, updating the info which is basically income - expenditure - amount of "credit" from last year, and everything is done?

I think it is, but it's territory I've not really dealt with before hence me being uncertain...

Any hand holding would be appreciated.

Thanks in advance

Tax_guru

You don’t ‘update’ the information, you will have to fill in a completely new form for 2010/11. You can either fill in the paper form which HMRC should have sent you (this must be in by 31st October) or register to complete the forms online. If you complete the tax return online then you have until 31 January 2012 to get it in.

You should have a look at the tax return that was completed for you last year and use this as a guide.

originalmiscellany

Thank you - I shall do that then - and a very fitting name if I may say so

John_Pierpoint

The on-line system allows you to enter information as you sort it out and them do dummy runs until you finally get it right. Then you submit it you "instantly" know:

It has not got lost in the post.
You have a calculation showing what you owe and how it has been calculated.
You can pay on line, as you can with the manual system.

The first time I used it, It did the first and last page and of course got loads of error messages. Then I could whittle away at it until it was right.

You will probably want to mug up on the difference between an improvement and a repair.

Are you just going for the 10% allowance or keeping all the records, when it comes to expanses against income to calculate profit?

originalmiscellany

JOhn, you've asked me some very salient points!
a) I am guessing (and I'll check) a repair is keeping something the same quality, whereas an improvement is where it's made better, .e.g. going from a second hand cooker to a brand new aga!?
Can you explain please the 10% allowance? I'm utterly unsure what this means.

John_Pierpoint

I am not the best person to advise on rented property, as I have never been a BTL Landlord.

Improvements are "Capital" and should be claimed against CGT, when the property is eventually sold.
Repairs are charged against current revenue and thus reduce profit and income tax thereon.

If you let furnished, you are likely to have lots of trivial repairs and replacements so you can charge 10% of the rent as these costs.
[This is similar to charging 45p a mile for business journeys.]

Tax is full of arbitrary rules, for example I think HMRC will now accept replacement windows that are double glazed as a legitimate expense, as it is illegal to fit any other sort (listed buildings, conservation areas etc. excepted).

Are you starting to think that your accountant might have been earning his fee?:D

originalmiscellany

A little more so than before! We were quoted just shy of £300 which I thought seems a lot...

originalmiscellany

Well we did it ourselves and got a friend (accountant) to check our figures out- wasn't too daunting as i had all figures in front of me, and I worked a spreadsheet to work all figures out. Rather pleased with myself, it just took several hours to do.
The upshot is that I owe 20p in tax - I can handle that