Rental Income Tax Allowances

mlot

I am currently renting out a small annex which as it is attached to my house which does not have separate supplies for utilities. For this reason the rental fee includes all bills (broadband, electricity, gas and water).

The question I have is how much can I claim as expenses on a tax return relating to the income from the property? Is it a percentage of the bills based on number of people, property size, or is just a "reasonable amount" pulled out of thin air?

All websites seem to say you can claim the utilities as expenses but I cant find anything which goes into more detail when it's not a supply just for the one property.

Any help is much appreciated.
Mark

dimbo61

So do you have lodgers or tenants ?
Do you offer All inclusive Rent as you can't separate  what you use and what your tenants/lodgers use in regard to Gas. Electric and Water

theartfullodger

Buy a book on property tax.  There are more than 10 taxes a landlord may have to pay.

How much can you claim?  What you ACTUALLY spend, solely and entirely on renting. 

What date did you start renting?

mlot

Currently have renters paying an amount that includes the bills. 

All websites say you can put the utility bills as expenses but that doesn’t help when the bills are for the main property and rental property combined. 

theartfullodger

There are many very dodgy websites out there (eg Trump's)..  Clearly in your case utilities not permissable (not wholly for rental business).

Either have separate meyering or accept reality.

WHEN did tenants first start renting, please?

sheramber

If you have a separate bill for the annexe tthat you pay, hen , yes, you can claim it as an expense.

Would you benefit from the fixed Property Allowance of £1000?

If you claim that you cannot claim for anything over that amount.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

mlot

Renters first started renting just over a year ago.

Not sure how much difference it makes but aside form the this I have no other income.

sheramber

You either claim a fixed amount of £1000 for expenses or you claim the exact amount of your expenses.

e,g   income £5000, less property allowance £1000, leaves profit £4000

0r   income £5000 less actual expenses £x leaves  profit £5000 less £x.

If X is less than £1000 then you are better off using property allowance.

theartfullodger

mlot said:

.....

Not sure how much difference it makes but aside form the this I have no other income.

No benefits (so presumably no kids or CB & CTC) no pension, no savings or stocks & shares , no job, no ebay no car boot?

Buy a book on property tax: There are over 10 taxes a landlord may pay....

AIUI with an attached annex it cannot be (may not be, legally impossible to be) an AST. Likely tenants, agents, solicitors won't understand that.