Tax return on rental property?

qwertyqwerty

Hi I started renting my property out in February of this year. I was unaware I would have to fill out a self assessment form even if I am making no profit on the property. Have tried to do this now, and the deadline for it is the 5th October will penalties for being late. What to do? any help much appreciated

Thanks,

00ec25

you are now too late to submit a paper return but you have until midnight on 31 January 2014 to submit the online return covering the 12/13 tax year (ie your rental income for Feb 13 - 5 April 13 plus any other income you received in that year. Do that and you will not have any penalties at all

you will need to register for the online system and get a UTR - this takes time so get cracking as you cannot submit until you are registered

read this and the links therein, it explains all you need to do
http://www.hmrc.gov.uk/sa/introduction.htm

anselld

If you are not making a profit you may not need to complete a tax return ...
http://www.hmrc.gov.uk/sa/need-tax-return.htm
... but it begs the question, why are you doing it if there is no profit?

However, you still need to inform the tax office in writing of the circumstances.

agrinnall

There are threads on the cutting tax board that suggest quite lengthy delays in getting a UTR issued. The recommendation is that you make sure you save the response when you apply in case it comes too late to get SA done by the end of January, because you should then be able to use that to appeal any subsequent fine.

Kynthia

As you've probably found out now, it's income that must be declared annually to the HMRC whether you make a profit or not. Get all the login info sorted now and then the cutting tax section of the forum will be able to advîse on completing the form. Don't leave it until the end of Jan as the system can get crazy.

Halle71

Hello

Sorry to hijack but my question is related so the same people may be able to help.
I've just looked at the link about registering for SA and have a question about an alternative option.

It says that if you are already on PAYE and your income from property is below £10k you may be able to have the tax collected through PAYE rather than SA. As we only started letting in November, this year our income will under £9000 and I believe this will be divided between us as joint owners as well.
Does this mean we don't have to do SA and, if so, how is this administered through PAYE? Presumably there still has to be some sort of tax return?

Thanks a lot

Halide

Kynthia

Halle71 wrote: »

Hello

Sorry to hijack but my question is related so the same people may be able to help.
I've just looked at the link about registering for SA and have a question about an alternative option.

It says that if you are already on PAYE and your income from property is below £10k you may be able to have the tax collected through PAYE rather than SA. As we only started letting in November, this year our income will under £9000 and I believe this will be divided between us as joint owners as well.
Does this mean we don't have to do SA and, if so, how is this administered through PAYE? Presumably there still has to be some sort of tax return?

Thanks a lot

Halide

I've not done it myself, so the people on the cutting tax forum (http://forums.moneysavingexpert.com/forumdisplay.php?f=22) might be better to answer this. However I think you contact the HMRC and they ask you to send a written breakdown of your income and expenditure to show your profit. As a result they adjust your tax code for next year so that you pay tax on the profit over the year through your salary instead of as a lump sum after filling in the tax return. Maybe give the HMRC a call.

G_M

Halle71 wrote: »

Hello

Sorry to hijack but my question is related so the same people may be able to help.
I've just looked at the link about registering for SA and have a question about an alternative option.

It says that if you are already on PAYE and your income from property is below £10k you may be able to have the tax collected through PAYE rather than SA. As we only started letting in November, this year our income will under £9000 and I believe this will be divided between us as joint owners as well.
Does this mean we don't have to do SA and, if so, how is this administered through PAYE? Presumably there still has to be some sort of tax return?

Thanks a lot

Halide

Contact the Self Assessment Helpline

00ec25

Halle71 wrote: »

Does this mean we don't have to do SA and, if so, how is this administered through PAYE? Presumably there still has to be some sort of tax return?

as Kynthia says basically you contact HMRC declaring that you have rental income, also giving the NET profit figure. As you say you are joint owners then clearly this will be split 50/50 so each of you needs to contact HMRC individually

note it's HMRC's decision whether you are required to do a tax return or not, if they decide not then they will take your profit figures (they would normally require you to submit a written statement of your figures rather than accepting them verbally over the phone) and adjust your tax code and issue a revised coding notice to your employer (copied to you) so as to collect the extra tax due through PAYE, ie. your net pay from your employment will decrease.

Note if you owe more than £2,500 in tax it is unlikely they will adjust a tax code as that is the cap against a code adjustment, in that case you will be put on a tax return and normal lump sum payment rather than being able to spread the payments over 12 months via the tax code & PAYE option

also when you declare the income figure pay heed as to whether your total gross (ie pre tax) pay plus the rental net profit share plus any other gross income from savings interest & dividends etc means you will receive more than £40,115 in total. In that case you will be in the higher rate tax bracket and almost certainly will be required to do a tax return

Halle71

B*gger. We're both in the high rate backet already so SA it is then.
I'd hoped to save a bit of stress in the year I go back to work after maternity leave. Although SMP leaves me well below 40k for 2013/14 so I'll call them and see if I can get away with it for a year.....

Thanks for your help.

Guest101

qwertyqwerty wrote: »

Hi I started renting my property out in February of this year. I was unaware I would have to fill out a self assessment form even if I am making no profit on the property. Have tried to do this now, and the deadline for it is the 5th October will penalties for being late. What to do? any help much appreciated

Thanks,

I know you say your making no profit, but how much of the income is tax deductible?