Paying tax on my rent?

booksurr

being in the TA (even on active service) does not alter how you declare your rental income to HMRC compared to anyone else

if you receive even 1 penny of rent then you are required to notify HMRC of that fact. HMRC will then ask you to calculate your net profit. That is rent received - eligible costs. You will pay tax on the net profit figure at 20% if that is what your tax band is

here is some basic guidance about costs, (you are letting residential property not holiday lettings so ignore that latter stuff about capital allowances )
https://www.gov.uk/renting-out-a-property/paying-tax
http://www.which.co.uk/money/tax/guides/tax-on-property-and-rental-income/how-rental-income-is-taxed/

rental income is NOT self employment - your TA colleague was wrong. Rental income is its own unique category in tax law (so that the Govt can exclude things that apply to "normal" businesses) and is declared in a separate section of your tax return. You are legally required to inform HMRC that you have rental income, they will then decide if they want you to complete a tax return and if so they will send you one at which point you are in the system and cannot escape it!

of course you can wing it, but remember if you are found out your TA unit will deem that to be a breach of Army Code of Conduct (Values and Standards), so you are more vulnerable than others to the repercussions of being caught

BTW - thank you for your service :beer:

Trying_to_be_good

Most mortgage lenders are understanding about granting Consent to Let on a residential mortgage to members of the Armed Forces as they recognise the need to live somewhere else as part of the job.

So, the first job is to ask your lender for Consent to let.

The second part is to let HMRC know (or, as others have said, save yourself some admin grief by getting an accountant who can deal with simple rental income - you'll need to refer to it as 'rental income' as if you call it 'rent' some might assume you're talking about the rent you'd be PAYING as a tenant, not the INCOME as a landlord - even an unintentional landlord).

You'll need to fill in a tax return (or your accountant will), so if some of the income was before 5 Apr 14, you'll need to fill in a 13/14 tax return. Income from 6 Apr 14 to 5 Apr 15 will be on next year's form, for 14/15 (forms are sent after the tax year has ended).

Hope all that helps, and you stay serving our country :-)

somethingcorporate

rob9287 wrote: »

I phoned the bank and said can I change my address. As i was going to Afghan. I get my mum to open all my mail. Iv got landlord insurance on my property that i let out. My house is empty end of this month as they are moving to a bigger house.

But i do want to get this sorted now im back.

So my agent fees and gas servicing will all be tax deducted? Il have a look in the yellow pages when im home to find an accountant.

You best hope that a condition of your mortgage isn't that you have permission from the mortgage company to sub-let your property!

benjus

If you are spending more than 6 months per year outside the UK, I believe you would be classed by HMRC as a non-resident landlord. If this is the case, the letting agent should be deducting tax and sending it to HMRC on your behalf - unless you obtain from HMRC permission to receive rental income with no tax deducted (in which case you would be responsible for paying the tax as if you were resident).

http://www.hmrc.gov.uk/international/nr-landlords.htm

rob9287

Im not spending 6 months a year abraod every year. Jeez id leave the army if i was going on Op Tours for half the year every year :rotfl:

booksurr wrote: »

being in the TA

TA.... dont insult me :rotfl: :rotfl:

My house tennent moves out in 3 weeks and im putting it up for let and probs for sale too. Im back home next weekend so i can speak to an accountant as i currently live on camp. How much should i be looking at keeping aside for an accountant? Il also phone the bank and see what they say about letting it out.

I would like to live in my house again. But before going Afghan a few times and countless training exercises all over UK and being single i didn't seem it financially viable.

You work hard for years and when you finally get something every c**t wants a piece of your pie and its legal. When i was 20 i should of bought the bloody car instead, less hassle :rotfl:

Thanks for all input :-)

martindow

rob9287 wrote: »

You work hard for years and when you finally get something every c**t wants a piece of your pie and its legal. When i was 20 i should of bought the bloody car instead, less hassle :rotfl:

Thanks for all input :-)

Hmm. You pay tax on your salary and also need to pay tax on other income gained from renting your house. If none of us paid tax the army might not get paid!

vw100

Something to think about is, if you have a residential mortgage and let out the property and God forbid the worst does not happen such as a fire/flood. Then the insurance may not pay out as the mortgage is a standard residential mortgage - even though you have landlord insurance. Don't forget insurance company always try to wiggle themselves out of paying out. How they can check this out is, find out who is named on the utility bills, council tax, and other stuff like bank accounts. Unfortunately nothing is easy in life.

benjus

vw100 wrote: »

Then the insurance may not pay out as the mortgage is a standard residential mortgage - even though you have landlord insurance.

Are you making an informed comment or is this just something like that myth that comes up all the time on the motoring branch about not having an MOT automatically invalidating your car insurance? Do you have anything to back up your statement? On what basis would they refuse an insurance claim?

HappyMJ

vw100 wrote: »

Something to think about is, if you have a residential mortgage and let out the property and God forbid the worst does not happen such as a fire/flood. Then the insurance may not pay out as the mortgage is a standard residential mortgage - even though you have landlord insurance. Don't forget insurance company always try to wiggle themselves out of paying out. How they can check this out is, find out who is named on the utility bills, council tax, and other stuff like bank accounts. Unfortunately nothing is easy in life.

The insurance isn't concerned about the type of mortgage you have. They'll fix or rebuild whatever needs fixing pay out any out of pocket expenses you or your tenant had and move on.

johnbusby

Possibly Im missing something here but I can't see why your chosen occupation would have anything at all to do with your obligation to pay tax?

Surely tax evasion is tax evasion no matter what you do for a living?