8 Tax return allowances you NEVER knew about:
Many landlords don’t want to be mithered with receipts and claims but by reading this article you could save yourself a significant amount of money on your tax return just by knowing what you are entitled to claim.
1. Replace or Repair: HMRC considers things you would expect to be in the property such as baths, basins and central heating systems as ‘integral’ and allows landlords to claim any expenses incurred replacing or repairing these items. Items that need replacing must be replaced and not upgraded, if the old item is then sold on for example for spares and repairs then the monies collected for this must be deducted from the claim.
2. Property Upkeep: Repairs can be claimed for however the list of jobs that can be accounted for are now a lot wider, stone cleaning, damp and rot treatment etc can now be claimed for. Upkeep of a property can be put towards your tax return so do keep all receipts for jobs carried out to the property.
3. Empty or Void Rental months: These void periods where there is a change in tenancy HMRC does NOT make direct allowances for however they do look into personal circumstances to make allowances.
4. Letting Agent Fees: This is classed as a legitimate cost to a landlord and can be used towards tax return. It is important to keep all statements from letting agents as these will detail costs incurred.
5.Overdraft and Mortgage Interest: Bank charges to run an overdraft solely for rental purposes are allowed as well as the interest on a buy to let mortgage however the repayments are not.
6. Fully Furnished Properties: If you let your property out as ‘furnished’ HMRC allows you to either offset, each year, ten per cent of your net income against tax or to claim for individual items’ net replacement such as furniture, white goods or TVs.
7.Travel Costs: Mileage accumulated to travel to and from rental properties and ‘legitimate’ travel costs can be used against tax return so do keep a note of mileage and petrol costs.
8. Energy Saving Allowances: HMRC offers a Landlord’s Energy Allowance of up to £1,500 per dwelling. This includes the expense of loft insulation, cavity and solid wall insulation, draught excluding, hot water system insulation and floor insulation. This is to encourage landlords to keep their properties energy efficient.
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