New to Letting, when to contact IR

[Blund2004]

What is the procedure when declaring rental income to the IR, I'm going to start renting my old residence which now has a BTL mortgage as from the beginning of February. When do I inform the IR, at the end of the tax year or up front? There is not much profit after I have paid the interest on the mortgage, and can I write anything off against tax with regards to maintaining the property and paying for landlords insurance and gas certificates?

Thanks

[Tax Accountant]

What is the procedure when declaring rental income to the IR, I'm going to start renting my old residence which now has a BTL mortgage as from the beginning of February. When do I inform the IR, at the end of the tax year or up front? There is not much profit after I have paid the interest on the mortgage, and can I write anything off against tax with regards to maintaining the property and paying for landlords insurance and gas certificates?

Thanks

The rental income from 01.02.06 to 05.04.06 needs to be declared in your self-assessment tax return for the tax year 2005-06. This needs to be submitted, and any tax due paid, by the 31 January 2007.

Although you could notify your tax office as late as 30 September 2006, it is best to do so as soon as possible, even as early as the letting has commenced, so that they can send you your self-assessment tax return for completion sooner rather than later.

As far as the rental expenses are concerned, you can claim cost of letting agent's fees, adverting for tenants, buildings and contents insurance, safety certificates, painting and decorating to prepare for letting, ongoing maintenance, furnishings wear & tear allowance (10% of gross rents) if your property is furnished, loan interest on any mortgage secured on the let property, etc.

You cannot claim for your own labour if you do any work yourself. This is because you cannot be an employee of yourself.

Ramnik

[Blund2004]

Thank you for your comprehesive reply Ramnik.


Regards
B.

[JDO]

Blund2004, I would recommend you read 'The buy to let bible' by Ajah Ahuja.

It should be available from your local library.

It has very good advice for someone who is new to BTL.

Best of luck

Regards

John

[Tax Accountant]

Thank you for your comprehesive reply Ramnik.


Regards
B.
You are welcome. Consider paying it forward by helping others when you have no obligation to do so.

Also it is a good idea, as stated by JDO, to look up other detailed references for other possible expenses which could be claimed as an expense of your letting business.

Ramnik