First time self assessment tax...help!

sarah69696pink

Hi All,
Apologies if this is in the wrong section but I wasn't sure where else to put it.
I own a property that I have been trying to let out since May (it has been empty since then). I finally have a tenant that is due to move in Nov 7th.
I am aware I will need to report earning etc for tax purposes, however someone told me today I need to register now for the self assessment. I looked on the gov website and can see that for year 2013*2014 you need to register for self assessment by Oct 5th - do I need to do this even though I have not yet had anyone move in?

CLAPTON

your income will be tax year 2014-15 so you need to register after april 2015

Prothet_of_Doom

CLAPTON wrote: »

your income will be tax year 2014-15 so you need to register after april 2015

You will need to register NOW, ready to fill in a tax return sometime between 6th april 2015 and 31st Jan 2016 and pay the tax by end of March 2016 (I think)


Keep a running total of incoming vs out goings and work out the ongoing profit. Ensure that you put aside 40% of that, in a separate account, and then when your tax bill is lower than that you'll have a nice surprise.

sarah69696pink

Thanks for your reply.

sarah69696pink

Prothet_of_Doom wrote: »

You will need to register NOW, ready to fill in a tax return sometime between 6th april 2015 and 31st Jan 2016 and pay the tax by end of March 2016 (I think)


Keep a running total of incoming vs out goings and work out the ongoing profit. Ensure that you put aside 40% of that, in a separate account, and then when your tax bill is lower than that you'll have a nice surprise.

Thanks - I don't think there will be any profit tbh - the rental price does not even cover agent fees, mortgage and service charge, but better than it being empty.

TheCyclingProgrammer

Prothet_of_Doom wrote: »

You will need to register NOW, ready to fill in a tax return sometime between 6th april 2015 and 31st Jan 2016 and pay the tax by end of March 2016 (I think)

There isn't any need to register now. Especially if OP doesn't even know if they'll make any profit.

You have to notify HMRC that you're chargeable to tax within 6 months after the end of the relevant tax year.

Come the end of the tax year, once OP knows what income they have to declare, they can contact HMRC. If OP has no other income and their gross rental income is below the personal tax allowance threshold then there is nothing to report. If they have a job and are paid via PAYE HMRC might be able to collect any tax due by adjusting their tax code. Or they might request OP submits a tax return.

There's no rush.

Spidernick

I would say register now and get it over a done with (otherwise a few weeks or more may be lost getting set up) and prepare SA returns whether OP makes a profit or not. If a loss is made then these will be registered via the filed returns and can be used against any profits on the rental in the future.

I'm not sure to what extent HMRC will accept brought forward losses where not shown on an SA return, so my advice would always be the file returns re losses.

purdyoaten

sarah69696pink wrote: »

Thanks - I don't think there will be any profit tbh - the rental price does not even cover agent fees, mortgage and service charge, but better than it being empty.

Only the mortgage interest is allowable - not the total repayment.

Proethet of Doom is incorrect - there is no need to register now. Tax will be payable by 31st January 2016, not March 2016.

sarah69696pink

Thanks all - really helpful - especially the clarification of what is a expense (e.g. mortgage interest).

dodgymix

you probably dont even need to do a tax return if your pay is PAYE.

I spoke to an accountant recent regarding various matters including my Buy2Let

She said I just needed to write a letter to HMRC of rent income less allowable expenses. Cant remember number exactly but think it was £2.5k profit (or £5k for a couple) without needing to complete a tax return..
accountant offered to write the letter for me but its was £60 each + VAT.

Anyone know where I can get a simple letter head for this?.

TheCyclingProgrammer

It's £10k gross income or £2.5k profit limits per person if you want rental income collected through your tax code.

Which is another good reason why it's simply not necessary to register for self assessment is far in advance as you might not earn enough to complete one.

To the above poster: if you have rental income to report to HMRC for the 2013/14 tax year below these thresholds it might be easier to just ring HMRC. You're supposed to inform them by 5 October so get your skates on.