A UK property business is a business that an individual, partnership, trustees or a company carry out with a view to generating income from land. Property income includes rents from houses, flats holiday lets as well as parking spaces.
If you own a rental property you will have certain obligations towards HMRC and this is where Emulous Accounting can help fulfill those obligations of being a landlord.
If you rent a property out you must inform HMRC and register for self-assessment by 5 October following the tax year in which the rental income is received.
Overseas property business
UK tax law requires profits and losses from an overseas property business to be kept separate from profits and losses from the UK property business.
Profits and losses are calculated in the same way as they are for UK property business although losses from an overseas property business cannot be set against profits from a UK property business.
What are allowable property expenses?
Expenses are deductible if incurred wholly and exclusively for the purposes of the property rental business and are what HMRC describe as revenue in nature. Examples of revenue expenses can be but are not restricted to the following
- Repairs to property.
- Water charges and council tax.
- Agents fees and commissions.
- Insurance premiums.
- A proportion of your mortgage interest.
- Costs of services e.g. cleaners salary.
- Accountancy fees.
- Ground rents & service charges.
- Direct costs such as phone calls stationary & advertising.
How can Emulous Accounting help you:
- Prepare annual rental accounts for properties whether residential commercial, student lets, or furnished holiday lets (FHL).
- Calculate the tax payable on profits.
- Advise on claiming relevant expenses to help tax savings.
- Complete and submit your tax return using HMRC approved software.
If you need help and advice in relation to your rental property please get in touch.
For more detailed information and to arrange a free consultation, please contact us.