self assessment tax for BLT

katiedog

Hi Ive been renting my former residential property out for just over a year. I dont make a profit on it as the mortgage, letting fees and repairs are a bit more than the rent I recieve.

Do I still need to fill out a self assessment form ? If I do is there a simple guide to help with this?

Thanks for any help you might be able to give.

Pixie5740

Is your mortgage interest only or repayment? Only the interest can be deducted from the rental income, not the capital repayments.

kinger101

I think the tax rate varies, depending on whether the bacon is smoked or unsmoked, and whether the sandwich has mayonnaise.

lovinituk

kinger101 wrote: »

I think the tax rate varies, depending on whether the bacon is smoked or unsmoked, and whether the sandwich has mayonnaise.

You beat me to it

lovinituk

katiedog wrote: »

Hi Ive been renting my former residential property out for just over a year. I dont make a profit on it as the mortgage, letting fees and repairs are a bit more than the rent I recieve.

Do I still need to fill out a self assessment form ? If I do is there a simple guide to help with this?

Thanks for any help you might be able to give.

As far as I know, you still need to complete a self assessment even if you're making a loss.

kinger101

The loss on the rental can be offset against future profits on the same property rental. Plus, you'll need to make sure that the accounting loss is still a taxable loss.

TheCyclingProgrammer

lovinituk wrote: »

As far as I know, you still need to complete a self assessment even if you're making a loss.

The law is: you only have to notify HMRC if you're chargeable to tax. If you notify them they will send a request for a self assessment unless the tax can be collected through your tax code (HMRC have published limits for rental income that can be collected this way).

You are also obliged to submit a self assessment regardless of your tax position, if HMRC request one from you.

If OP has no rental profits, they are not chargeable to tax and are not obliged to notify HMRC of anything. They can of course register for self assessment voluntarily if they wish.

HMRCs website may say otherwise of course but what the law says and what HMRC say don't always align. The self assessment checker on gov.uk is misleading and not representative of the law (it also says company directors must submit a self assessment - also rubbish).

http://www.krwaccountants.co.uk/does-a-loss-making-rental-property-need-to-be-declared-to-hmrc.html

It goes without saying that OP should make very certain that they don't have any taxable profit. They also need to declare it if they have to submit a self assessment for some other reason.

brianposter

TheCyclingProgrammer wrote: »

HMRCs website may say otherwise of course but what the law says and what HMRC say don't always align. The self assessment checker on gov.uk is misleading and not representative of the law (it also says company directors must submit a self assessment - also rubbish)..

Could you provide some evidence for the last statement ?

TheCyclingProgrammer

brianposter wrote: »

Could you provide some evidence for the last statement ?

Well the law is available online.

Taxes Mansgement Act 1970.

Section 7 outlines the obligation to notify HMRC that you are chargeable to tax:

http://www.legislation.gov.uk/ukpga/1970/9/section/7/enacted

Section 8 outlines the requirement to file a return when a notice to file is received:

http://www.legislation.gov.uk/ukpga/1970/9/section/8/enacted

This is covered in more detail in the HMRC self assessment manual. This page outlines te requirement to notify HMRC:

http://www.hmrc.gov.uk/manuals/salfmanual/SALF210.htm

Specifically:

Exceptions to the requirement to notify chargeability
Section 7(3) to (7)

There are exceptions to this requirement. These are where the taxpayer has no chargeable gains (or such gains as there are do not exceed the annual exempt amount), and either:
has no net liability to income tax for the year, or
has had sufficient tax deducted at source to meet the net income tax liability for the year.

If you're referring specifically to the comment about company directors, what I mean is being a company director in itself does not create a legal obligation to submit a tax return. A director who is chargeable to tax must notify HMRC like anybody else.

HMRC have a policy of wanting directors to do tax returns so they may request one anyway, in which case you would be obliged to submit it.

Search on AccountingWeb and you'll find many accountants comments that also back this up.

Thrugelmir

katiedog wrote: »

Hi Ive been renting my former residential property out for just over a year. I dont make a profit on it as the mortgage, letting fees and repairs are a bit more than the rent I recieve.

Expensive property to maintain!

TheCyclingProgrammer

Also note that while there is a mandatory fine for failing to file a tax return on time if you have had a notice to file, even if you owe no tax (this changed a few years ago), the maximum penalty for failing to notify HMRC that you are chargeable to tax remains capped at the amount of tax owed. So if you notify late but pay the tax on time there is no fine. And if you don't owe any tax, there is no penalty that HMRC can impose.