Declaring tax on your rental property

LANDLORDS if you have used a knowledgeable Letting Agent you should be aware that any income received from your rental property has to be declared to HMRC .

Landlords who have failed to declare their rental earnings are being warned to pay up or face harsher penalties. HMRC’s Let Property Campaign is targeting widespread tax evasion on property lettings, and estimates that 1m buy-to-let and other private landlords are not declaring their rental income, depriving the public coffers of £550m a year. Accountants said such initiatives have been a cost-effective way for HMRC to recover tax  in a range of sectors, with voluntary disclosures in past campaigns yielding more than £500m since 2007.

IF you are not aware, there is a long list of outgoings and expenses that class as deductions :-

• letting agents’ fees
• legal fees for lets of a year or less, or for renewing a lease for less than 50 years
• accountants’ fees
• buildings and contents insurance
• interest on property loans
• maintenance and repairs to the property (but not improvements)
• utility bills, like gas, water and electricity
• rent, ground rent, service charges
• Council Tax
• services you pay for, like cleaning or gardening
• other direct costs of letting the property, like phone calls, stationery and advertising

More information is available from HMRC .  And for any Landlord looking into this for the first time, please remember as a Local, reputable Letting Agent, we work very close with professional Accountants who we would be happy to refer you to, and that is all part of the service we offer.