If you do, do you declare the income to HM Revenue and Customs? As HMRC is continuing to investigate taxpayers in the let property sector.
Not Sure if you need to declare the income ?
If you let a property out it is likely that you need to declare the income to HMRC as it is highly possible that not all the payments you make are allowable for tax eg Mortgage repayments – only the interest element is allowable. Indeed even if you make a loss it may be advantageous to tell HMRC about the loss so when you start making profits, you can claim the loss relief.
Checking Tax Returns
HMRC are enquiring into tax returns made by landlords to ensure that the correct tax has been paid. If you receive an enquiry letter from HMRC you need to review the letter very carefully to ensure that you respond correctly to HMRC.
Have not declared income
If you have not been submitting tax returns to HMRC, now is the time to voluntary register with them, make the appropriate returns and pay the tax due, before HMRC contact you.
HMRC will have collected data from various sources and will be making enquires in due course. It is therefore generally better for you the taxpayer to voluntary disclose rather than HMRC enquiring.
You need to prepare a return when:
- You are self-employed, a Partner or a director of a limited company
- You have untaxed income from investments, rental income or overseas income.
- You are due a tax refund either due to allowable expenses or your income has varied during the tax year
- HMRC has requested that you complete a return.
Under the current UK tax system it is you responsibility to prepare and submit your tax return on time.
The tax year is 6 April to 5 April and you have until 31 January following to submit your personal tax returns.
So act now and complete your tax return.