flat rented out tax question

random44

hi all,

i have a flat rented and think i will need to pay tax on my income

i earn £500, 250 of which goes to my other partner whom we jointly own the place. another £60 for management thus around £190 of income


would i have to only pay tax on the £190? how do i do that and how often. would i deduct the management fees from the income ( maintenance around £1k per year)



many thanks

Suarez

Keep all reciepts for expenses then deduct from the income. Mortgage INTEREST can also be offset.

You will need to complete a self assessment.

random44

thanks for this

how often do you have to send this back or complete the form ?

googler

random44 wrote: »

thanks for this

how often do you have to send this back or complete the form ?

The tax year for everyone in the land runs from 6 Apr to 5 Apr every year.

The due date for submitting self-assessment tax returns and paying tax is around the end of the year in which the tax year ends. You figure out your tax accounts after the beginning of April, and you have a few months in hand after that to finalise and submit them.

Details of self assessment, tax forms etc are on the HMRC website.

https://www.hmrc.gov.uk

If you're paying tax on other income already, the income from your rental will be taxed at the highest rate at which you're currently paying.

How long have you been renting this out without declaring tax?

Is the total mgt fee £120? i.e. your share of it is the £60, or are you paying the full mgt fee yourself?

random44

i am paying the full management fee and rented out since last year feb which i was not aware that i should declare tax etc and didn't know i have to pay tax on rental income

how would they bill you? is it deducted from your main income tax or do you have to pay by cheque etc ?

random44

what will happen now, will i get fine or some !!!! for the feb to april of 2012 which i have not returned my form ?


i guess i am still within the limits to return the form for april- 2012 to april 2013. do i have few month ??

googler

I'd suggest you write to HMRC and declare that you've realised your mistake for Feb 12 to Apr 12, and request guidance on how to proceed.

For Apr 12 to Apr 13, start putting your figures together, and get self assessment forms etc off the HMRC website ready for around Nov-Dec 13, which is when that year will be due.

Do you pay tax on any other income? Is it deducted by an employer (PAYE)?

random44

thanks for the advice. yes i pay tax on my income through my employer.
having look at few places it seems that 31 jan is the dealine to return the tax form, was that an old rule ? if so what is the latest that you can return your self assessment form for april 2012 to april 2013?


would i likely to be fined for the two month gap ?

sorry for number of questions just in a bit of panic mode.
do i get any allowance for tax free rental income ? on the internet people seem to suggest you do get this if you own a home and rent a room of it

thanks

holly_hobby

On SA return date is 31 January each yr.

Here are details of the dates, penalites for late filing etc - http://www.hmrc.gov.uk/sa/deadlines-penalties.htm

You are referring to the Gov Rent A Room scheme, which permits a tax free receipt of upto £4250 for renting furnished accomodation in your own home .... not renting out the WHOLE property, which evidently means this isn't your own home, and the scheme does not apply to.

Your gross rental income may be mititaged for tax purposes, by the application of mortgage interest pertaining to the property, associated management, servicing, letting and professional costs, maintenance (not improvement) costs, landlord ins, travel costs directly involved in you managing the let, provision of services and costs of landlord certs/checks etc, (list not exhaustive).

You then declare your net rental income, upon which your applicable tax will be calculated.

You may want to engage an accountant to help with your returns, applicable deductions, advice on prev non-reporting, and how to manage this with HMRC ... or of course you could contact HMRC directly to discuss.

Hope this helps

Holly

random44

thanks very much for the post . it did help clarify most of my questions.

according to the link, i can return my tax return up until 31 oct 2013 for april2012 to april - 2013, is this correct?


or 31 jan 2014 for online return


i do not want to register a company etc, can i just fill the form and return it . i am asking because i have seen some people suggesting to use accountant to avoid registering company which has administration costs etc



also as per the website i can ask for the payment to be paid back using my tax code as opposed to making a direct payment , is that correct ?

random44

according to this i should expect a big fine

Length of delay
Penalty you will have to pay
1 day late
A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late
£10 for each following day - up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late
£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late £300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead.
These are as well as the penalties above.
Example