Hi every 1 I know you all will be very busy now but can anyone help me? about the rental income, Tax and what rate I need to calculate the Tax and which form need to fill out.
my cleint have just one propery on rent and she is also working part time so her income is after her Tax and NI dedcuction and not more then £11000 Year
Any help be very appreciated and thank you all in an advance.
Hi Minaxi
Which tax year is this for? Hope its not the 5 April 2016 year - if so then you are late and will be penalised - the deadline for online submissions was 31 January and for paper - last October.
You need to fill out a self assessment. What software do you use for completing self assessments? As you work through it will tell you what tax is due. There isnt enough info on here - even if her payrolled income is below the usual personal allowance the rent on one property alone could easily take her into the next tax bracket depending on where it is.
Have you had a look on the HMRC site?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Cheshire
Thank you and not april 2016 but it will be 2016/2017 she has only start renting from Sep2016 and does she has to register as a selfemployed to file her selfassesment for rental income and what will be tax rate ?
Many thanks
Minaxi
She will need to complete a self assessment. I cannot advise on the tax rate as I do not know her circumstances (any other income, other taxable items).
What software do you use for self assessments?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
She will then get a UTR no and you can complete a self assessment form after March. Please note that mortgage interest relief has changed in 2016-17 so be careful when filling that bit out.
Just out of interest is it a property she is renting out or a room in her home? If the latter take a look at rent a room relief instead.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John
No she has bought propery to rent and i think she is only paying interest only on morgage not sure, and on HMRC webside there is some rental income is free fron tax so can anyone explane me how this will work out please , sorry if a i am asking more.
Many thanks,
Minaxi
A buy to let mortgage? (As you say interest only) Rent a room relief is available, as a 'relief' but not in this case.
Also no NI to pay on rental income.
Interest is, up to yet, an available deduction.
Losses are netted off against other property income profits, if no other property, loss is carried forward. (Different set up for FHLs)
No more wear and tear allowance. Instead, replacement cost of new item, less cost to dispose old item is an allowable dedication. Must be equal to, rather than a improvement of the replaced asset, else it is measured against cost of an equal spec item.
The subject matter (Rental income) is quite vast.
-- Edited by abacus12345 on Friday 10th of February 2017 02:06:02 PM
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
This subject is frankly too vast to expect a bunch of strangers to give you all the answers. You need to be doing some research in the appropriate places and then perhaps asking some specifics on the smaller areas you may be struggling with rather than the whole subject. Or better still, if you have no idea of this area then you should pass this one on to an appropriately qualified Accountant.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I was reading something the other day, not relevant here but.... HMRC had a field day with a guy who owned a few properties, with the intention to earn rental income - problem for him was he selling them on too quickly - was deemed to be trading in houses. Income tax on the lot! Ouch!!!
__________________
Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
