Shared Ownership Landlord - Tax Return

TatyDanny

Hi, 

I am a shared ownership landlord (with full permission from the bank and HA). Doing my tax return and need help on what I can expense and how.

1. Can I expense the rental part I pay to HA
2. The interest part of the mortgage - 20% of it - is that correct?
3. Car purchase- I use to travel to and from the property - a percentage against what is used for landlord duties?
4. Car maintenance costs- insurance, repairs, road tax, petrol as a percentage for what is used for running the landlord duties?
5. Stationary - are there specific rates?
6. Phone, broadband - are there specific rates?
7. Subletting application costs?
8. Landlord licence?
9. Paint and decorator due to damage and not upgrades?
10. Anything else I may be missing?

And what is the best way to present this information and the receipts?

If it helps I am in the 20% tax band. 

I would be grateful for your help. 

Kind regards, 
T

K_S

@tatydanny Not an accountant but afaik - 

Yes to 1, 8, 9

Maybe to 7

No to 3, 4, 5, 6

3 & 4 - when you travel for landlord work (eg: property inspection) I believe you can use the normal HMRC driving costs expense which I think is 45p/mile up to a certain number of miles

2 - you input this in the finance costs section, not as an expense. The SA return will then credit you 20% of that, you'll see that in the calculations before submission

TatyDanny said:

Hi, 

I am a shared ownership landlord (with full permission from the bank and HA). Doing my tax return and need help on what I can expense and how.

1. Can I expense the rental part I pay to HA
2. The interest part of the mortgage - 20% of it - is that correct?
3. Car purchase- I use to travel to and from the property - a percentage against what is used for landlord duties?
4. Car maintenance costs- insurance, repairs, road tax, petrol as a percentage for what is used for running the landlord duties?
5. Stationary - are there specific rates?
6. Phone, broadband - are there specific rates?
7. Subletting application costs?
8. Landlord licence?
9. Paint and decorator due to damage and not upgrades?
10. Anything else I may be missing?

And what is the best way to present this information and the receipts?

If it helps I am in the 20% tax band. 

I would be grateful for your help. 

Kind regards, 
T

tacpot12

These links might be some help: 
Money Matters: Subletting a shared ownership home - Shared Ownership Resources
What Property Expenses Can You Claim As A Landlord? - UK Landlord Tax
Expenses and allowances landlords can claim - Which?

The Which link does say that you can charge the rent you pay against your profits, and this does make sense. 

This link confirms that you cannot deduct 20% of the interest you pay as an expense, you have to treat it as a tax credit as per the link: Buy-to-let mortgage interest tax relief explained - Which?

This is a list of the expenses you can charge against your income: 

• Rent (that you pay), Ground Rent, Service Charges
• Council Tax/Water/Gas/Electric during void periods (unless you are letting the property out with these items included in the rent, then you can deduct all your costs). 
• Landlord Insurance
• Letting Agents Fees 
• Accountants Fees
• Accountancy Software (and potentially any other software or IT services you use to run the business)
  
• Bank Charges
  
• Phone Calls
• Postage
• Stationary (don't for get the cost of printer ink that can be charged in proportion to the number of pages printed for business use)
  
• Advertising/Marketing the property (if you are using third-party services to do this) 
• Referencing Tenants (if you are using third-party services to do this - you can't if you do it yourself, e.g. using Facebook!) 
• Inventory preparation and reviews on Check-in/Checkout (if you are using a third-party to do this - you can't if you do it yourself) 
• Travel to the property for viewing, repairs, check-in, check-out, and mid-tenancy inspections. It would be best to use the HMRC milage allowance of 45p per mile (for the first 10,000 miles), but you can work out all the expenses of running the car and apportion them to the rental business. I'm not sure how the car purchase would be treated, but it seems to be a capital expense, so it can't be deducted from your income to work out your profit.
• Any sort of repairs that are needed on the property, except those that are improving the property (such expenses might be used to offset CGT but can't be used to offset income). 
• Cleaning at the end of tenancies
• Court Solicitor and Bailiff Fees if you need to evict a tenant
• Servicing and Safety Checks (e.g. Gas Safety Inspections, Periodic Electrical Inspections, Legionella Risk Assessments) 
• Cost of using your home as an office if you spend more than 25 hours a week running your property empire. (You are not going to be able to justfy this, so don't claim it - I've included it for completeness, although no list of expenses you can claim in relation to a rental business can ever be regarded as complete!) 

Note that any expense has to be incurred wholly and and necessarily for the business, or apportioned so that the portion of the expense you are claiming is only that portion that was incurred wholly and necessarily for the business. 

There is also a tax relief you can use for the cost of replacing 'domestic items' in the property (e.g. fitted carpets and any white goods, furniture or crockery you supply to the tenants).

The best way to record your accounting data is either using an accounting system or spredsheets - for Self-Assesment returns you don't have to present the information in any form, you just add it to the Property Rental part of your return. if you were to be investigated, the tax invetigator will accept any organised form of accounting records. 
Receipts should be kept physically, but they can also be photographed and stored electronically for ease of access and reference. I have a cloud storage service where all my accounting data and electronic copies of receipts are stored. I use an old accounting package for my accounting, but you could easily use spreadsheets. The Small Business Toolbox channel on YouTube has a video on this and other relevant subjects.

I extract the data I need for my Self-Assessment return from the accounting package, and put it into a spreadsheet before transferring it onto the return. This allows me to make notes, and also just copy the previous year's spreadsheet to get me started for the next year.  

TatyDanny

tacpot12 said:

These links might be some help: 
Money Matters: Subletting a shared ownership home - Shared Ownership Resources
What Property Expenses Can You Claim As A Landlord? - UK Landlord Tax
Expenses and allowances landlords can claim - Which?

The Which link does say that you can charge the rent you pay against your profits, and this does make sense. 

This link confirms that you cannot deduct 20% of the interest you pay as an expense, you have to treat it as a tax credit as per the link: Buy-to-let mortgage interest tax relief explained - Which?

This is a list of the expenses you can charge against your income: 

• Rent (that you pay), Ground Rent, Service Charges
• Council Tax/Water/Gas/Electric during void periods (unless you are letting the property out with these items included in the rent, then you can deduct all your costs). 
• Landlord Insurance
• Letting Agents Fees 
• Accountants Fees
• Accountancy Software (and potentially any other software or IT services you use to run the business)
  
• Bank Charges
  
• Phone Calls
• Postage
• Stationary (don't for get the cost of printer ink that can be charged in proportion to the number of pages printed for business use)
  
• Advertising/Marketing the property (if you are using third-party services to do this) 
• Referencing Tenants (if you are using third-party services to do this - you can't if you do it yourself, e.g. using Facebook!) 
• Inventory preparation and reviews on Check-in/Checkout (if you are using a third-party to do this - you can't if you do it yourself) 
• Travel to the property for viewing, repairs, check-in, check-out, and mid-tenancy inspections. It would be best to use the HMRC milage allowance of 45p per mile (for the first 10,000 miles), but you can work out all the expenses of running the car and apportion them to the rental business. I'm not sure how the car purchase would be treated, but it seems to be a capital expense, so it can't be deducted from your income to work out your profit.
• Any sort of repairs that are needed on the property, except those that are improving the property (such expenses might be used to offset CGT but can't be used to offset income). 
• Cleaning at the end of tenancies
• Court Solicitor and Bailiff Fees if you need to evict a tenant
• Servicing and Safety Checks (e.g. Gas Safety Inspections, Periodic Electrical Inspections, Legionella Risk Assessments) 
• Cost of using your home as an office if you spend more than 25 hours a week running your property empire. (You are not going to be able to justfy this, so don't claim it - I've included it for completeness, although no list of expenses you can claim in relation to a rental business can ever be regarded as complete!) 

Note that any expense has to be incurred wholly and and necessarily for the business, or apportioned so that the portion of the expense you are claiming is only that portion that was incurred wholly and necessarily for the business. 

There is also a tax relief you can use for the cost of replacing 'domestic items' in the property (e.g. fitted carpets and any white goods, furniture or crockery you supply to the tenants).

The best way to record your accounting data is either using an accounting system or spredsheets - for Self-Assesment returns you don't have to present the information in any form, you just add it to the Property Rental part of your return. if you were to be investigated, the tax invetigator will accept any organised form of accounting records. 
Receipts should be kept physically, but they can also be photographed and stored electronically for ease of access and reference. I have a cloud storage service where all my accounting data and electronic copies of receipts are stored. I use an old accounting package for my accounting, but you could easily use spreadsheets. The Small Business Toolbox channel on YouTube has a video on this and other relevant subjects.

I extract the data I need for my Self-Assessment return from the accounting package, and put it into a spreadsheet before transferring it onto the return. This allows me to make notes, and also just copy the previous year's spreadsheet to get me started for the next year.  

Thank you for taking the time to write this is extremely helpful post, I am very grateful. Could I ask re: the £1000 allowable expense and what is included I understand that if I choose to claim that there are other items which I cannot claim for such as the 20% of the interest. I need to work out what will be the most accurate route to go. 

TatyDanny

TatyDanny said:

tacpot12 said:

These links might be some help: 
Money Matters: Subletting a shared ownership home - Shared Ownership Resources
What Property Expenses Can You Claim As A Landlord? - UK Landlord Tax
Expenses and allowances landlords can claim - Which?

The Which link does say that you can charge the rent you pay against your profits, and this does make sense. 

This link confirms that you cannot deduct 20% of the interest you pay as an expense, you have to treat it as a tax credit as per the link: Buy-to-let mortgage interest tax relief explained - Which?

This is a list of the expenses you can charge against your income: 

• Rent (that you pay), Ground Rent, Service Charges
• Council Tax/Water/Gas/Electric during void periods (unless you are letting the property out with these items included in the rent, then you can deduct all your costs). 
• Landlord Insurance
• Letting Agents Fees 
• Accountants Fees
• Accountancy Software (and potentially any other software or IT services you use to run the business)
  
• Bank Charges
  
• Phone Calls
• Postage
• Stationary (don't for get the cost of printer ink that can be charged in proportion to the number of pages printed for business use)
  
• Advertising/Marketing the property (if you are using third-party services to do this) 
• Referencing Tenants (if you are using third-party services to do this - you can't if you do it yourself, e.g. using Facebook!) 
• Inventory preparation and reviews on Check-in/Checkout (if you are using a third-party to do this - you can't if you do it yourself) 
• Travel to the property for viewing, repairs, check-in, check-out, and mid-tenancy inspections. It would be best to use the HMRC milage allowance of 45p per mile (for the first 10,000 miles), but you can work out all the expenses of running the car and apportion them to the rental business. I'm not sure how the car purchase would be treated, but it seems to be a capital expense, so it can't be deducted from your income to work out your profit.
• Any sort of repairs that are needed on the property, except those that are improving the property (such expenses might be used to offset CGT but can't be used to offset income). 
• Cleaning at the end of tenancies
• Court Solicitor and Bailiff Fees if you need to evict a tenant
• Servicing and Safety Checks (e.g. Gas Safety Inspections, Periodic Electrical Inspections, Legionella Risk Assessments) 
• Cost of using your home as an office if you spend more than 25 hours a week running your property empire. (You are not going to be able to justfy this, so don't claim it - I've included it for completeness, although no list of expenses you can claim in relation to a rental business can ever be regarded as complete!) 

Note that any expense has to be incurred wholly and and necessarily for the business, or apportioned so that the portion of the expense you are claiming is only that portion that was incurred wholly and necessarily for the business. 

There is also a tax relief you can use for the cost of replacing 'domestic items' in the property (e.g. fitted carpets and any white goods, furniture or crockery you supply to the tenants).

The best way to record your accounting data is either using an accounting system or spredsheets - for Self-Assesment returns you don't have to present the information in any form, you just add it to the Property Rental part of your return. if you were to be investigated, the tax invetigator will accept any organised form of accounting records. 
Receipts should be kept physically, but they can also be photographed and stored electronically for ease of access and reference. I have a cloud storage service where all my accounting data and electronic copies of receipts are stored. I use an old accounting package for my accounting, but you could easily use spreadsheets. The Small Business Toolbox channel on YouTube has a video on this and other relevant subjects.

I extract the data I need for my Self-Assessment return from the accounting package, and put it into a spreadsheet before transferring it onto the return. This allows me to make notes, and also just copy the previous year's spreadsheet to get me started for the next year.  

Thank you for taking the time to write this is extremely helpful post, I am very grateful. Could I ask re: the £1000 allowable expense and what is included I understand that if I choose to claim that there are other items which I cannot claim for such as the 20% of the interest. I need to work out what will be the most accurate route to go. 

Sorry I should have mentioned the other expenses include:
1. Landlord Licence 
2. Travel expenses 
3. Subletting application
4. Gas safety
5. Stationary, phone, broadband
6. Mortgage interest (I suspect I either claim the 1k or not claim the 1k and do it separately - basically it's one or the other)

Sorry I am new to this and trying hard to make sense of it all.