Declaring Rental Income - confused !

navmanwestmids

Hoping there is someone here that is going to be able to put my mind at rest. I have renting out a property since the third of February this year (2012). When do I need to declare this income ? and when will the tax be due on it ?

do I need to return a self assesment or declare the income by the 5th next month ?

Sally_A

Yes, you should declare it, however for the 2011 - 2012 period you could be "in credit" with the tax peeps, as you would have had outlays for renting, such as gas checks, electrical checks etc etc. Tax returns for the y/e 2012 don't have to be submitted until Oct 12 for paper, or Jan 13 (I think) for online.

navmanwestmids

Sorry, to clarify then, any money that Ive receieved from the 3rd of Feb this year till now will have to be declared before April the 5th 2012 ?

Werdnal

Yes, all income needs to be declared. You can do it online, or request a paper return, but make sure you ask for it to include the "income from Property" section as this is specific to renting and not included in your "earned" income from any jobs you have.

You will be able to offset your GSC, EPC, insurance costs etc, and if they are higher than your income, as you have only just started letting, you can use this "loss" to offset any tax you owe next year. HMRC will send you an account for the tax you may have to pay - even of it is nil or a minus figure!

More info here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/index.htm

nikki1520

You should inform HMRc of the need for them to send you a tax return. If you dont do this, and leave it until next January, you won't get all your online details in time, and will get a fine, which you will then have to appeal against.

You can only offset losses on property income against future profit from property - so if you have a loss this year, then you can only offset it against your rental profit next year.

nikki1520

Savinder wrote: »

think the tax on rental income is 40%?

Not quite the case - it depends on your marginal rate of income tax. So it can vary between 0% and 50%

navmanwestmids

Werdnal wrote: »

Yes, all income needs to be declared. You can do it online, or request a paper return, but make sure you ask for it to include the "income from Property" section as this is specific to renting and not included in your "earned" income from any jobs you have.

You will be able to offset your GSC, EPC, insurance costs etc, and if they are higher than your income, as you have only just started letting, you can use this "loss" to offset any tax you owe next year. HMRC will send you an account for the tax you may have to pay - even of it is nil or a minus figure!

More info here: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/index.htm

thanks, I have never had an extra income before so this will be the first time I'll have to request a paper return if if I ask for this before the 5th I doubt I'll have the chance to get it in by the 5th, factoring post etc.

Am I likely to be fined ?

Werdnal

navmanwestmids wrote: »

thanks, I have never had an extra income before so this will be the first time I'll have to request a paper return if if I ask for this before the 5th I doubt I'll have the chance to get it in by the 5th, factoring post etc.

Am I likely to be fined ?

Read Sally A's reply earlier - although the cut off for year end is 5th April, and therefore that is the date you use to declare your income to for 2011/12 tax year, you do not need to submit the form until October! Online deadline is usually January 2013.

So you will not be fined if you do not complete it by 5 April!

Once you have submitted one year, they automatically send you the form in subsequent years.

G_M

navmanwestmids wrote: »

Sorry, to clarify then, any money that Ive receieved from the 3rd of Feb this year till now will have to be declared before April the 5th 2012 ?

No.

As Sally said earlier:

Tax returns for the y/e 2012 don't have to be submitted until Oct 12 for paper, or Jan 13 (I think) for online.

You have until those dates to declare the income for the period April 2011 - April 2012.

However as nikki said you'll need to ask HMRC to send you the forms which you can do at any time. Just don't leave it till the last minute!

navmanwestmids

Werdnal wrote: »

Read Sally A's reply earlier - although the cut off for year end is 5th April, and therefore that is the date you use to declare your income to for 2011/12 tax year, you do not need to submit the form until October! Online deadline is usually January 2013.

So you will not be fined if you do not complete it by 5 April!

Once you have submitted one year, they automatically send you the form in subsequent years.

ahhh thats great thank you! so I'll request a form and have until October to return it..........:j

dimbo61

Might not be a bad idea to use an accountant at first as he/she can help you with allowances which you can offset against tax ( interest on mortgage but not repayment part), repairs, new kitchen, windows, boiler service,repair, GSC, EPC, Electrical periodic inspection ETC