flat rent income expense

flat rent income expense

Didn't find your answer?

I rent out my flat last year:

Every month I have income of 900 GBP but also do need to pay council tax, heating, maintenance, I rent it out furnished and had to purchase a new sofa, and common expenses (renovation, fire insurance).

Would these cost be allowable.

Is there any yearly allowance on rental income?

Replies (4)

Please login or register to join the discussion.

avatar
By the_drookit_dug
09th Jan 2021 21:04

Engage an accountant an they will be able to advise. There's also lots of useful info on HMRC's website for you to do some background reading.

Thanks (1)
avatar
By Tax Dragon
10th Jan 2021 07:11

There isn't a yes/no answer. Some costs (heating) can be deducted. Some costs (new sofa) probably can't. Some (refurbishment) depend on the situation and you haven't told us enough about that to decide - and might even then be some-and-some, not yes/no.

There used to be an annual allowance that you could use instead of some of the costs. But the rules have changed. One reason to hire an accountant is that it's part of her/his job to keep up with changes in the rules. You would get tax relief for an accountant's fees.

Thanks (1)
Replying to Tax Dragon:
avatar
By Truthsayer
10th Jan 2021 09:07

'You would get tax relief for an accountant's fees'

No you wouldn't if the fee was for preparing the tax return. An accountant's fee is only deductible against rental income if it is for work on accounting matters for the everyday running of the letting, and this is hardly ever the case with small lettings.

Thanks (1)
Replying to Truthsayer:
JCACE
By jcace
10th Jan 2021 10:02

Per PIM2120:
"Fees incurred on preparing accounts for commercial reasons and on many other accountancy services will meet the ‘wholly and exclusively’ test. Hence the cost can be deducted in computing rental business profits.

Strictly, any additional fees incurred for computing and agreeing the tax liability on rental business profits are not deductible. But, under a long-standing practice, normal recurring legal and accountancy fees incurred in preparing accounts or agreeing the rental business tax liability can be deducted."

Thanks (1)