Do I need to fill in Self-Assessment?

satbav

Hi,
Apologies f this has been asked elsewhere, nothing relevant has come up in my searches.
I currenty have a full time job, and live with my wife, in her flat.
I also have my own flat, and rent that out to 2 tenants.
For tax year: 6 April 2019 - 5 April 2020, I made -£3484 (yes, minus), after having to refit a new floor following a leak. I also only charge rent to cover the mortgage.
Am I right in thinking I don't need to fill in the self assessment?
Assuming I'm a 'Self-employed as a sole trader', I filled in the 'Do I need to' on the gov website, and it said i didn't need to. However, I feel that's strange that they don't even need to be made aware of what I'm doing?
Thanks,
Bav

theartfullodger

As long as you're happy not to be able to carry forward losses that reduce your tax bill in future years...

Done any training in being a landlord?  Buy a book on property tax, it will save you time and money.  There are more than 10 taxes a landlord may have to pay.

Sounds like you're charging below market rent.  How kind of you to be so charitable.... sigh....

SpiderLegs

Yes, as above, if you have genuinely made a 3k loss this year then it does not need declaring. However you may then struggle to legitimately offset that against any future profits.

anselld

That is either a very expensive floor or your calculations are incorrect.
You can only claim the interest element of the mortgage, not any capital. 
You are not self employed nor sole trader.  Property letting is not a trade or an employment; it is entered in its own section on the self assessment forms.  
Do you not have insurance covering leaks and other damage?

sheramber

I also have my own flat, and rent that out to 2 tenants.
For tax year: 6 April 2019 - 5 April 2020, I made -£3484 (yes, minus), after having to refit a new floor following a leak. I also only charge rent to cover the mortgage.

When did you start letting the flat?

satbav

Started renting in August 2019, The mortgage is fairly high, and as I got consent to let by Nationwide, they add an 1% on the repayment rate. From January, I'm out of initial 2 year term, and as I don't live there, move onto SMR +1% (4.59%). Ouch.
I had a slow leak underneath the floorboarding of the whole flat, so had to replace all of it.
@theartfullodger so if I declare it anyway, the loss can be used to reduce the tax I pay next year?

AdrianC

satbav said:

I currenty have a full time job, and live with my wife, in her flat.
I also have my own flat, and rent that out to 2 tenants.
For tax year: 6 April 2019 - 5 April 2020, I made -£3484 (yes, minus), after having to refit a new floor following a leak. I also only charge rent to cover the mortgage.
Am I right in thinking I don't need to fill in the self assessment?

Yes, of course you do.
The fact that your business made a loss doesn't stop you having to complete a tax return (and you can offset that letting loss against your PAYE or any other SA income, too - you'll probably get a tax refund)

How you justify the amount of rent you charge is up to you - it's still business income.

Falafels

You've stated that you have a full-time job, so are you also registered with HMRC as 'self-employed as a sole trader'? There's no assumption about it; it's something you are required to do by law if this is the case! Reading between the lines of your original post, I doubt that you are. For a start, I'm sure you'd remember!

This is not at all the same as letting out your flat. There is a separate part of the self-assessment which relates to letting out property, and this bit you do need to fill in. You also need to look carefully at the allowances that you can claim against rental income, and there are plenty of online resources to help you do this. As anselld says, either it's a very expensive floor or your calculations are incorrect.

greatcrested

and since you've brought up the expensive mortgage, it' worth re-iterating anselld:

You can only claim the interest element of the mortgage, not any capital.

SonnyLumiere

Re offsetting losses: see the HMRC property tax manual https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4210 at page PIM4210: "property business losses can only be set off against profits from the same property business".
If you don't understand how to do property accounts or deal with tax, I'd advise engaging an accountant for the first year or so, learn the ropes from what they do, and then do it yourself. Good luck!

penners324

Why not remortgage to a buy to let mortgage?