Let Property Campaign

adonis10

Does anyone have experience of this and how long HMRC give to pay the required tax?

Case I am interested in relates to 14 months of rental between Aug 14 and Oct 15.

foxy-stoat

You start the ball rolling, send it all your forms, they tell you how much tax to pay and you pay it.

You also have to tell them how much the fine is going to be and interest, they either agree or not, that is done either online or with complicated forms.

Thats how its supposed to happen.

If there is no money to pay the all the tax then you should pay what you can and ask them to adjust your tax code and collect the required tax over the next year with your PAYE earnings.

adonis10

foxy-stoat wrote: »

You start the ball rolling, send it all your forms, they tell you how much tax to pay and you pay it.

You also have to tell them how much the fine is going to be and interest, they either agree or not, that is done either online or with complicated forms.

Thats how its supposed to happen.

If there is no money to pay the all the tax then you should pay what you can and ask them to adjust your tax code and collect the required tax over the next year with your PAYE earnings.

Is this sarcasm? Why would I tell them what the fine and interest is to be?

foxy-stoat

adonis10 wrote: »

Is this sarcasm? Why would I tell them what the fine and interest is to be?

No it isn't, I was being serious. You tell them how much the fine is going to be based on their tables and percentages, the interest is a percentage based on the time.

https://www.gov.uk/estimate-self-assessment-penalties

adonis10

The landlord in question didn’t inform the mortgage company (naivety rather than being dishonest) therefore the mortgage was not changed to BTL, can they still claim the mortgage interest? I was under the impression that they cannot however HMRC said they are able to even though it was not BTL.

foxy-stoat

Yes you can, you just need a statement from the lender or annual statement which showed the interest paid.

He should of got consent to let if it was a residential mortgage - no concern of the HMRC though.

Pixie5740

adonis10 wrote: »

The landlord in question didn’t inform the mortgage company (naivety rather than being dishonest) therefore the mortgage was not changed to BTL, can they still claim the mortgage interest? I was under the impression that they cannot however HMRC said they are able to even though it was not BTL.

HMRC are correct. The mortgage interest is a legitimate business expense even if the eejit in question failed to get consent to let.

adonis10

Pixie5740 wrote: »

HMRC are correct. The mortgage interest is a legitimate business expense even if the eejit in question failed to get consent to let.

Being slightly naive doesn't make them an idiot. They had never done anything of the sort before and simply didn't know therefore employed a letting agent to advise and take care of the rental, needless to say that this company did not inform them that informing the lender is necessary.

Pixie5740

adonis10 wrote: »

Being slightly naive doesn't make them an idiot. They had never done anything of the sort before and simply didn't know therefore employed a letting agent to advise and take care of the rental, needless to say that this company did not inform them that informing the lender is necessary.

I find it amazing the number of landlords who manage to go to the effort of engaging a letting agent and/or finding tenants yet can't be bothered to find out if the mortgage terms allow the property to be let out and fail to realise that rental income is subject to income tax.

adonis10

Pixie5740 wrote: »

I find it amazing the number of landlords who manage to go to the effort of engaging a letting agent and/or finding tenants yet can't be bothered to find out if the mortgage terms allow the property to be let out and fail to realise that rental income is subject to income tax.

Me too, but it is what it is. We are deviating from the objective here.

Next question, flat was rented until mid August 2015 and sold Oct 2015. It was up for sale from May 2015 and vacant with the owner paying the bills from mid Aug until sale date. For the 2015/16 tax year, can they claim expenses for the period from when the tenant moved out until sale date? During this time there was no intention to let, only to sell.

00ec25

adonis10 wrote: »

can they claim expenses for the period from when the tenant moved out until sale date? During this time there was no intention to let, only to sell.

no they can't

surprising given how many rental related questions you have asked on here over the last few years that you have still not read the basics

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2510

my bolding
For example, if the business only consisted of letting a single house, it would cease when the tenant left and the customer began to use the house as a private residence or, alternatively, when they decided the house wouldn’t be re-let.