How Do I Complete A Self Assesment For A Rental Property

Ploppy1999 | 08:58 Sat 06th Jul 2019 | Law

4 Answers

Hi everybody.
I rent a house via northwood (managed property service) and pay a mortage on it. The rent covers the mortgage. I need to complete a self assment but the document makes it look like i earn ove 4k in profit from rent. Is there a guide on how to complete the form correctly as i think i must be doing it wrong, i don't want to end up with a massive tax bill. May thanks

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Peter Pedant

I think you let a property via northwood
and my man you are in luck
here is the advice I wrote to a cousin about tax returns:

first download UKP 1
your profit is so small that 'three line return' is sufficient
( takings - expenses = profit)

Box 20 is total income – on a historical rent received basis. do the gross amount - the handling charge is claimable

Box 24 and 25 Are allowed expenses –---(family comment) - these are expenses to run the property - maintenance, mending things, having CH serviced and so on.

Box 25 should NOT be more than 30% gross income as that is the industry norm and trying to get more will trigger an investigation

Box 26 is where you put in your mortgage interest repayments having read the new rules. – NOT capital sum repayments – this figure should be on your mortgage repayment schedule.

Box 27 is accts fee - since you are doing it yourself it is nil

Box 29 I actually don’t know….but I wouldn’t try – oh receipted stationary – inks – not for use of computer – it all has to be solely for the renting….

Box 38 and 40 will pop up automatically

Do NOT make a loss – it will trigger an investigation. No one lets at a loss.

Ploppy I think you think that the whole of the mortgage is claimable. it isnt. the only bit you can claim is the interest on the mortgage capital sum. Read the notes - new rules. when I was doing this, you cd claim all the interest - but now it is tapered ( they say)

if you are doing this for the year ended 6 Ap 2019, I admire your foresight. ( I have also submitted mine)

and bob's your uncle

Buenchico

You seem to be doing things the hard way!

As long as the turnover from your business(es) doesn't exceed £150,000, you can elect to submit your return on a 'cash basis' when you go through the online process. (The option to use 'cash basis accounting' occurs very early on when you submit a return online).

If you use cash basis accounting you don't have to tell HMRC anything at all about your sources of income or your expenses. You simply work out your profit for the year and declare just that one figure. (Obviously you still need to keep records of how you arrived at that figure, just in case the taxman decides to check).

As long as you've worked out your overall profit (if any) before you start submitting your tax return, the whole thing should take well under 5 minutes to complete if you use cash basis accounting.