You’ve got a property with at least five rooms for rent and have recently started a business. You’ll need to register your properties first before you continue to receive revenue from your properties. Here’s a short guide how UK taxes rental properties.
1. Inform the HMRC
The Her Majesty’s Revenue and Customs (HMRC) is the branch of the government that you need to pay for taxes. If you do not pay your taxes, you could be charged with a penalty on top of the taxes you are due.
2. What Kind of Income Do I Report?
It is important to report any income from property rental that goes over £2500 yearly. You should the self-assessment tax return form P810. The self-assessment tax should be submitted within the start of the financial year. You could also have it sent three days before the deadline assigned to you.
3. What You Could Claim To Reduce Tax for Residential Properties
You are given the right for allowable expenses if you are spending money on the day to day running of the properties, including a letting agent’s fees, legal fees for lets, accountant’s fees, building and contents insurance, interest on property loans, virtually anything that you could have extra expenses with. However, utilities are put out of the question.