Rental Income - Is it the amount paid by the tenant to the agency or is it the amount agency to me?

george987

Hi,
Suppose the letting agency is collecting the rent every month and then they deduct the commission and they pay the remaining rent to my bank account, which amount I should use as my rental income?

For example the tenant is paying £500 on the 28th of every month to the letting agency’s bank account.
Agency then deducts £50 commission and transfers £450 to my account after a week or so.

When I calculate the total rental income which amount should I use as monthly income - £500 or £450 ?
If I am using cash basis accounting, I think it will be easier to go for the amount which comes to my bank account (£450) and date on which the amount appeared in my bank statement.

Thanks,

Dazed_and_C0nfused

It's £500.

With an allowable expense of £50 (unless you are claiming the property allowance instead of expenses).

Jeremy535897

Cash basis accounting for rental income is what you have to use, unless you deliberately elect out of it. That is a completely different issue. It means you pay tax on rent when it is received, rather than when it should be received.

You always include the gross rent as income, and then claim the expenses in the appropriate boxes, for example repairs, insurance, and agent's commission.

[Deleted User]

Whether the cash basis is used or not it is £500 income less £50 expenses. The cash basis does not refer to ‘cash received’ but to the accounting method employed. 

george987

Thanks to all,
If the letting agency generates the rent statement which shows they received £500 from the tenant and paid £450 to my account on the 28th of March 2021 (Tax Year: 2020-2021), but the amount is credited in my bank account only on the 6th of April, 2021 (Tax Year: 2021-2022), in which tax return should I include the rent £500 - 2020-2021 or 2021-2022?
Thanks

[Deleted User]

2020/21 would be correct.

Jeremy535897

Why would it take 10 days to be credited?