Landlord tax return services
We are specialist property accountants for buy to let landlords based in London and Surrey. We provide landlord tax return services for a fixed fee that ensures that the tax liability of landlords is kept to a minimum. We provide landlord tax return services to both UK resident and overseas resident landlords.
If you own a property and receive rental income in the UK, you will have certain responsibilities towards HM Revenue and Customs (HMRC) and that is where Martax Accountants can help to fulfill all your obligations for being a landlord. We provide our landlord tax return services in London, Kingston Upon Thames, Wimbledon, Cobham, Weybridge and all the surrounding boroughs in London and Surrey.
Whether you are renting a room, a property/flat for long term let, or running a property business as a Furnished Holiday Let (FHL), our experts can help provide you with the best advice and on-going support to minimise your tax bill. Our landlord tax expert can discuss your tax needs over the phone, in our offices or at a place convenient to you.
What is income from property?
If a person carries on a business for generating income from land in the UK, this will be called income from UK property. Income from a UK property includes rents from properties such as houses and flats or part of a flat or house, such as a room or a parking space. Property income can also come from other activities related to land such as shooting or fishing rights.
Income from property does not include income from a trade such as farming, running a hotel or carrying on an unrelated business. Profits relating to a trade are taxable as self-employment income.
Do I have to pay tax on income from property?
Yes, you are liable to pay tax on your property income if the taxable profits are more than your personal allowances or other specific reliefs.
Rates of Tax
The rates of tax you pay on your rental profit depends on your total income for the tax year, from all sources of your income e.g. employment, self-employment, saving income, dividends etc.
|Income Tax Rates 2022/23|
|Band||Taxable profits||Tax Rate|
|Personal allowance||Up to £12,570||0%|
|Basic rate||£12,571 to £50,270||20%|
|High rate||£50,271 to £150,000||40%|
|Additional rate||Over £150,001||45%|
What are your responsibilities towards HMRC as a Landlord?
How to calculate your taxable rental profits?
Profits from rental property business are calculated on an accrual basis. This means that taking rent receivables and deducting any allowable expenses payable. Rent receivables minus expenses payable gives the taxable rental profits or loss for the year. These amounts are not necessarily the amounts physically received and paid in the year, but those which relate to that tax year.
However, there are different rules to follow if you are:
What are allowable expenses?
Expenses are deductible from rents only if they are incurred ‘wholly and exclusively’ for the business of letting. This means that if an expense wasn’t incurred for the purpose of your property rental you can’t offset the cost against the rental income. The most commonly incurred expenses in relation to rental property business are as follows:
The following is a list of some expenses which are not allowable:
Property business losses
Where allowable expenses payable is greater than rent receivables, a property business loss will arise. If a taxpayer has an overall property business loss, it can be carried forward and set against property income from a UK property business in future tax years.
There are exceptions to the above rule as you can’t offset UK rental property losses against the rental profits from furnished holiday lettings and overseas rental properties as there are separate rules which apply to these types of properties.
Rent a Room Relief
If a landlord is letting out a room to a tenant in his main residence, a special relief is available. This is called ‘Rent a Room’ relief. For the tax year 2018/19, if your gross income from renting a room in your main residence does not exceed £7,500 before deduction of any expenses, your rental income will exempt from tax.
Overseas property Business
If you are renting out properties overseas, you should keep the rental income and expenses separate from the UK property rentals.
If a taxpayer lets out an overseas property such as a villa in Spain, any profits are chargeable to tax as income from overseas property business.
To calculate the profit on overseas rental property, the same rules apply as for the UK property business. However, if there is a loss on the overseas property business, it cannot be offset against UK property business income. Overseas property loss can only be set off against the future overseas property income. You might also be able to claim relief against your UK tax bill if you have paid tax on the income.
What Martax can do for you
At Martax, we provide specialist landlord tax return services, including the following:
If you need any help or advice in relation to your let properties, please contact us.