Self Assessment advise

Aarnav

Hello MSE gurus,
I require advise regarding taxation as I have not done before. I am an employed individual in 40% tax bracket. I'm about to rent out my flat and receive the rent to my account which I believe i have to pay tax on.
1. what should be the procedure? should I register self assessment on HMRC?
2. does my tax code changes? do I need to inform my employer?
3. by when do I have to submit the tax money to HMRC? is it monthly or one lump sum? 
4. should i be paying rent on the full amount or do i have to deduct my mortgage from it. (example: if the rent is £1000/month and monthly mortgage is £400 then I pay tax only on £600? Do I add any receipts where I have conducted property improvement to reduce the amount for tax?

any advise would be helpful.

many thanks,
Aarnav

Dazed_and_C0nfused

1.  Yes

2.  Not if you don't want it to.  And no you don't.
3.  By 31 January 2022.  Once you have a Self Assessment account (UTR) you can make voluntary advance payments if you wish but there is no need to.
4.  You cannot deduct mortgage payments but may be entitled to some tax relief for mortgage interest.

You should have a read up on mortgage interest changed for landlords, particularly as you are already a 40% payer.  And look at the land and property pages of the Self Assessment return and accompanying notes on gov.uk to get a better idea about expenses in general.

jim_walton

Regards no 4.  The first £1000 of rental income  is tax free I believe. 

Jeremy535897

jim_walton said:

Regards no 4.  The first £1000 of rental income  is tax free I believe. 

It is not that simple. The deduction of £1,000 is an alternative to claiming actual expenses and for the 20% tax reduction for loan finance, and in this case, I would be very surprised if the £1,000 was the better alternative.

jim_walton

Your right it’s not that simple. Tax relief on “ actual expenses” what does that mean in practice.  

Jeremy535897

jim_walton said:

Your right it’s not that simple. Tax relief on “ actual expenses” what does that mean in practice.  

If you really want to know, read HMRC's guidance and the notes to SA105.

jim_walton

Please don’t interpret my answers as flippant. I have a genuine interest in this as I’m just about to let out a property I am buying and any knowledge of tax relief will be valuable to me. 

Jeremy535897

jim_walton said:

Please don’t interpret my answers as flippant. I have a genuine interest in this as I’m just about to let out a property I am buying and any knowledge of tax relief will be valuable to me. 

You would be better with your own thread for your own specific question. It is also not helpful to question things when your question has already been answered in the thread.

You can learn a lot from reading the notes to SA105 at:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873515/SA105_English_Notes_2020.pdf

The GOV.UK website has a lot of information on letting property:
https://www.gov.uk/renting-out-a-property/paying-tax