Letting a house out - do I need to tell HMRC

swindiff

If I didn't pay the £90 to my accountant I'd only end up with a tax bill which was £90 more, so it's not really costing me anything is it, and it is more convenient for me.

comeandgo

Your tax bill would not be £90 more, it's 20% of that or 40% if higher tax rate.

Thrugelmir

HappyMJ wrote: »

Look at receipts for repairs and maintenance add them up and enter that figure. That's also about £1,000. Done.

Don't you claim for any insurances?

Car trips travelling to the property?

HappyMJ

swindiff wrote: »

If I didn't pay the £90 to my accountant I'd only end up with a tax bill which was £90 more, so it's not really costing me anything is it, and it is more convenient for me.

Nobody pays 100% income tax.

You would save £18 or £36 in income tax from the £90 charge.

Thrugelmir wrote: »

Don't you claim for any insurances?

Car trips travelling to the property?

I don't...no. I self insure most things.

I don't own a car.

theartfullodger

HappyMJ wrote: »

.......Look at bank statement add up all interest on loans secured on property. That's about £1,000. ....

... and then...

HappyMJ wrote: »

...... I self insure most things......

I'll wager £10 to an agreed housing charity that your "loans secured on property" require you to insure it..

btw I do my own returns: After using accountants who for 2 years made the same mistake which if I hadn't kept pointing out to them would have cost me thousands....

"Self insure.." eh?? So, if worst came to worst, place burns down, tenant's grandchildren are 'orribly burnt then no payout to rebuild & repair neighbouring properties damage, huge legal case being sued by grandchildren & you are certainly stuffed, possibly bankrupt....

Not worth, IMHO, not having basic landlord insurance.

Oh, and get a book on saving on property tax: GUARANTEE you'll learn something that will save you more than the cost of book e.g.
http://www.amazon.co.uk/How-Save-Property-Carl-Bayley/dp/1911020013

HappyMJ

theartfullodger wrote: »

... and then...

I'll wager £10 to an agreed housing charity that your "loans secured on property" require you to insure it..

btw I do my own returns: After using accountants who for 2 years made the same mistake which if I hadn't kept pointing out to them would have cost me thousands....

"Self insure.." eh?? So, if worst came to worst, place burns down, tenant's grandchildren are 'orribly burnt then no payout to rebuild & repair neighbouring properties damage, huge legal case being sued by grandchildren & you are certainly stuffed, possibly bankrupt....

Not worth, IMHO, not having basic landlord insurance.

Oh, and get a book on saving on property tax: GUARANTEE you'll learn something that will save you more than the cost of book e.g.
http://www.amazon.co.uk/How-Save-Property-Carl-Bayley/dp/1911020013

Loan T's and C's probably do say it's required. I don't see the point. I'll take the risk and not insure. I just did a quick quote on Comparethemarket and it's well over £1,000. It's not worth it. In the 14 years I've owned it I've never insured it.

jaybeetoo

https://www.gov.uk/government/publications/self-assessment-uk-property-sa105

Simples! You don't need an accountant.

surfer_crx

Just wanted to say thanks for the advice on this one.

I decided to go and see an accountant mainly for advice on what to expect from the HMRC and how best to deal with it.

In the interim I have collected all of my invoices together and put them on a spreadsheet to see whether I have actually made money as I didn't know that you only took the interest into consideration not the capital as well, it's going to be a lot closer than I thought.

haras_nosirrah

Happy mj are you saying you self insure on building insurance or contents?

If you have a flat and someone else sorts building insurance then fair enough but if you have a house and are not insured for buildings then you are mad. 1k a year? Is the house in the UK equivalent of Beirut?

Also you are trusting probably in excess of 100k assets to a tenant who may come home drunk, try to cook something but pass out instead (this happened to someone I know), the house could get flooded or something happen to it which means tenant can't live there and you are left in the position of unrentable house, tenant in a valid tenancy so you have to pay for them to rent elsewhere and also you still have to pay the mortgage on the damaged property and fund repairs. My building insurance on my 180k value rental house is about £220 a year including legal expenses and landlord contents to 10k. Not worth self insuring that risk.

Norman_Castle

I contacted the HMRC and spoke to someone on the let property campaign who said in a nutshell that if I haven't made money that I don't really need to let them know.

HMRC may tell you that a tax return is not needed for an amount for which currently no tax is payable. Getting this in writing would prevent future problems. You still need to keep records so you know accurately how much is being earned and to asses your tax liabilities.