Posted by Admin - 03/05/2016
Property Income should be disclosed to HMRC within 6 months of the end of the tax year in which you started letting, therefore by 5 October to avoid penalties.
What is Property Income?
Property income is any income from land or buildings and includes renting furnished or unfurnished residential or commercial property, holiday lets and even letting part of your home to a lodger. This does not include hotel, guest house or B& B facilities.
When you decide to let a property, your lettings business begins as soon as you receive your first rent or from the date that the tenants lease begins, whichever comes first.
Informing the HMRC
Call the self assessment helpline if your rental profit is more than £2,500.00, or your rental income is more than £10,000.00 and register for self assessment. It is quicker to register property income using HMRC online services. If your rental profit and income is less than this then call the helpline to report it.
HMRC should be informed of property income regardless of whether you are making a profit or los on the property, a loss simply means you will have no tax to pay.
The registering process can take up to 20 days to complete.
Remember to keep a note of your 10 digit Unique Taxpayer Reference number (UTR) and your user ID to log in Online. You will receive an activation code through the post which has to be activated within 28 days of receipt otherwise the code will expire.
HMRC will ask you to complete a self assessment tax return each year to complete.
Any tax that you are liable for can be paid in two ways; 1. paying a bill or 2. placing a restriction on your tax code, this will depend on your personal circumstances and the amounts of tax owed.