Which expenses can be offset against tax ?

[burg]

I've just had the first year of rental income so need to pay the appropriate tax.

Which outgoings can be offset against the income ? Presumably agents finding fees, gas safety certificates, new fence (which blew down in the wind), sundry plumbing items, tins of paint etc can all be claimed.

Can I make any claim for my own time put into jobs like decorating (maintainance type decorating, not refitting) at a sensible 'general labour' type rate.

Do I have to have receipts for all these items (paid cash for the fence for example so don't have one) ?

Does this have to be submitted on a special form, I assume there is one dedicated to rental income ?

I'm grateful for any help on this as I don't plan to involve an accountant as once I know the rules/guidelines it should be fairly straightforward.

[stephenp]

I would advise you use an accountant, you would be likely to save more by having a professional on the job than what they would charge you.

I can reccommend you to my accountant if need be who only charges me £100 for the Property income and self assessment as i provide him all the details in the format he requests - Pollard & Co 07796678680

As for your expenses all of which are allowable with the exception of your time, how can you bill yourself, you would then have to pay tax on that income!!! mortgage interest is also an allowable expense.

Regards

[Robin]

I've just had the first year of rental income so need to pay the appropriate tax. Which outgoings can be offset against the income ? Presumably agents finding fees, gas safety certificates, new fence (which blew down in the wind), sundry plumbing items, tins of paint etc can all be claimed.

You can claim for every expense incurred such as everything from new light bulbs if you replace them in your property to part of your phone bill to decorating materials etc etc. I don't use an agent. Can't stand middlemen. I advertise via free web sites like gumtree & torent. So I can even claim a proportion of new PC purchase. Best thing also to gaurantee an automatic 10% wear & tear allowance is to let furnished. This means only 90% of your rent is assessible for tax to start with.

Can I make any claim for my own time put into jobs like decorating (maintainance type decorating, not refitting) at a sensible 'general labour' type rate.
I agree with previous reply

Do I have to have receipts for all these items (paid cash for the fence for example so don't have one) ?
Yes keep for 6 years in case the tax man wishes to see them

Does this have to be submitted on a special form, I assume there is one dedicated to rental income ?
Just use the Land & Property page on the tax return form. I've set up a spreadsheet to put the right quantities into numbered boxes/cells. Then enter figures on the return online. Grount rents go into box 5.24, 5.25 repairs & renewals, 5.26 finance costs etc etc. Piece of cake.

[MR M]

Best thing also to gaurantee an automatic 10% wear & tear allowance is to let furnished. This means only 90% of your rent is assessible for tax to start with.

How do HMRC define "furnished"?

Would carpets, blinds and a fitted kitchen constitute "furnished"?

[TaxationPete]

NO. Dining , lounge and bedroom furniture is required, wardrobes, beds etc so you can live in it sensibily. Regards Peter

[MR M]

NO. Dining , lounge and bedroom furniture is required, wardrobes, beds etc so you can live in it sensibily. Regards Peter

Damn........10% more tax to pay immediately then to those nice chaps at HMRC :rolleyes:

[billmccallum]

Hate to disagree with Robin, but you cant just write of 10% of rental income to cover depreciation of furniture, you could only depreciate a percentage of the cost of the furniture. In most cases, the depreciation would only be allowable on capital asessts, which would normally cost over £1,000 per item.

But this does mean you could write off the total cost of items under that value as a normal business expense.

If running your business from home you can claim for the cost of using part of your home as an office (including a proportion of utilities/council tax, etc).

The very best advice is at hand in the local tax inspectors office, if you call in and ask for thier advice they will usually be pleased to help as it can save them a great deal of time in the future if they dont like the way you have submitted your accounts.

Advice only - no liability...

[Tax Accountant]

Hate to disagree with Robin, but you cant just write of 10% of rental income to cover depreciation of furniture, you could only depreciate a percentage of the cost of the furniture. In most cases, the depreciation would only be allowable on capital asessts, which would normally cost over £1,000 per item.

But this does mean you could write off the total cost of items under that value as a normal business expense.

If running your business from home you can claim for the cost of using part of your home as an office (including a proportion of utilities/council tax, etc).

The very best advice is at hand in the local tax inspectors office, if you call in and ask for thier advice they will usually be pleased to help as it can save them a great deal of time in the future if they dont like the way you have submitted your accounts.

Advice only - no liability...

I have to disagree with Bill.

(1) Please refer to wear and tear allowance if you let your house ' flat furnished. This allows you to deduct 10% of your gross rents in lieu of claiming any expense for the furnishings or replacements.

(2) I also consider that his following statements are without basis:

''In most cases, the depreciation would only be allowable on capital asessts, which would normally cost over £1,000 per item.''

''But this does mean you could write off the total cost of items under that value as a normal business expense.''


(2) I also don't agree that ''The very best advice is at hand in the local tax inspectors office''. This is illustrated by the fact that Bill has not understood the basis of claiming for furnishings.

Also in my experience, the tax office will normally advice on general matters which are clear cut and simple. Try asking questions out of the ordinary to 4 tax enquiry staff on 4 different days and you will most probably get 4 different answers.

Ramnik

[Grange]

I don't even understand what bill has written, so I can neither agree nor disagree.