Letting & HMRC tax payments

bluearco_92

I commenced letting a flat that I own in February 2024. The flat was initially let on a 12 month lease which has now rolled on to a monthly agreement. The rental is £675 per calendar month which is paid directly to myself.  I am a PAYE employee. My basic salary including company car ,medical insurance etc is £60k. I have not received/completed a tax return for the 2024/2025 period. I wanted advice on if the 2024/2025 tax owed  to HMRC could be included in the 2025/2026 tax return or should I notify HMRC staight away and deal with it before the 2025/2026 tax return date.
  Would the rate of taxto be paid to HMRC be a straight 40% of the rental income ? I paid an initial finders fee of 1 months rent (£675) for the advertising and setting up the tennancy and wanted to check if this should be deducted from the tax calculation?

anselld

You need to get HMRC to put you on self assessment for 24/25 tax year.  You have until 31 Jan 26 to complete so not a mad panic.
Yes finders fee is deductible.  Surely there must be other expenses, gas safety certificate for example.

mlz1413

The tax year is 6th April to 5th April,  so you need to do a tax return for the Feb 2024 to 5th April 2024 this year.  File and pay by 31/1/26, but you can do it earlier. 

Treat the first rent payment as income,  even though it didn't go into your bank and then show the finders fee as an expense, net result is zero.

Did you pay for an EPC? Or was that still in date from buying the flat.
Cleaning, repairs before rental?

If you aren't sure you could use an accountant and the money paid to them is also deductible.

mybestattempt

mlz1413 said:

The tax year is 6th April to 5th April,  so you need to do a tax return for the Feb 2024 to 5th April 2024 this year.  File and pay by 31/1/26, but you can do it earlier. 

Treat the first rent payment as income,  even though it didn't go into your bank and then show the finders fee as an expense, net result is zero.

Did you pay for an EPC? Or was that still in date from buying the flat.
Cleaning, repairs before rental?

If you aren't sure you could use an accountant and the money paid to them is also deductible.

The rental income started in the 2023/24 tax year so that is the first year for self assessment.

Possibly rents due/received were £675 x 2 by 5 April 2024, so after finders fee is deducted the taxable rental income 2023/24 may not be zero.

The tax return for 2024/25 is due by 31 January 2026.

mlz1413

mybestattempt said:

mlz1413 said:

The tax year is 6th April to 5th April,  so you need to do a tax return for the Feb 2024 to 5th April 2024 this year.  File and pay by 31/1/26, but you can do it earlier. 

Treat the first rent payment as income,  even though it didn't go into your bank and then show the finders fee as an expense, net result is zero.

Did you pay for an EPC? Or was that still in date from buying the flat.
Cleaning, repairs before rental?

If you aren't sure you could use an accountant and the money paid to them is also deductible.

The rental income started in the 2023/24 tax year so that is the first year for self assessment.

Possibly rents due/received were £675 x 2 by 5 April 2024, so after finders fee is deducted the taxable rental income 2023/24 may not be zero.

The tax return for 2024/25 is due by 31 January 2026.

Oops my mistake,  thanks for correction on dates.

I wasn't saying the return would be zero, but trying to say the finders fee is a claimable expense,  but don't forget the 1st month's income which paid the fee would also need declaring.  Neither of these went in or out of OPs bank account as they were the same value.

bluearco_92

Thank you all for the replies. That has been very helpful.

LITRG

Hello, you may find our guidance on tax on property income useful in understanding your position: https://www.litrg.org.uk/savings-property/property-income/working-out-property-income