Property news: Landlords advised to keep records for tax & allowances
Landlords advised to keep records for tax & allowances
It is not uncommon for landlords to pay too much tax because they are missing out on the many tax allowances they are entitled to, according to local letting specialists Leaders. As the new tax year commences, Leaders are reminding landlords of their tax obligations, and also of the allowances they are entitled to.
Leaders’ Western Road branch manager David Thorne, says: “Any profit made from letting a property is subject to UK income tax, whether the landlord lives in the UK or not, and must be reported in a Self Assessment Return. However, certain deductions are allowable, and with the growing numbers of buy-to-let investors entering the market for the first time, we believe that many landlords may not be aware of them.”
Leaders are advising landlords to bear in mind that they are permitted to make certain deductions from their rental income before calculating profit, although these deductions are only applicable when the property is being let or is available for letting.
“We strongly advise landlords to keep all receipts and letting agent statements to prove income and expenditure,” says David. “If you have an organised system, your Tax Return will be much easier to complete and you won’t end up paying more tax than is strictly necessary.”
Allowable deductions include the cost of:
• Mortgage interest on loans used to purchase
the rented property or to fund improvements
• Your agent’s letting and management fees
• Repair and maintenance of the property and contents
(but not the cost of improvements)
• Ground rent and maintenance charges on leasehold property
• Water and sewerage rates unless charged to tenants
• A wear and tear allowance applicable to furnished property only, equal to 10% of the gross rent received (less council tax and water rates) or you can deduct the cost of replacement from the rental income in the relevant tax year
• If you pay someone to assist with the work involved in letting your properties, the cost is allowable if you can prove that they are paid at local commercial rates and they report the income in their own tax return
• Council tax whilst the property is vacant
• Accountant’s fees
• Legal expenses (but not those relating to the purchase or sale of the property)
• Stamp duty on tenancy agreements
• Building and contents insurance and any insurance claim fees
• VAT on all charges where applicable
Maslen makes the investment
As further testament to its well-trained and dedicated staff, Maslen Estate Agents has been awarded Investors in People accreditation for the fifth time in a row.
First achieving Investors in People status back in 2001, Maslen Estate Agents has continued to impress the assessors with its level of investment in staff development, progression and well-being. They were particularly impressed with the levels of training for all staff in the company, from apprentice to managers.
Launched in 1991, Investors in People is the UK’s leading people management standard, specialising in transforming business performance through people.
It offers a practical, flexible and easy to use framework for improving business productivity, performance and competitiveness in organisations of all types and sizes through good practice in people management.
Investors in People assessor, Michele Spencer, commented: “The company puts an enormous amount of time and effort into ensuring that its people are kept well informed, up to date with their knowledge, and able to input into the daily operations of the business.”
She added: “It has a strongly developed ethos of training and developing the people that work at Maslen.”
David Maslen, Director, said: “Our staff are with us for a long time and what really came across in the assessment is that they all care about our clients, the reputation of the company and their colleagues. I am very proud of our team and see our commitment to the staff as key to our success.”
