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Wednesday, October 21, 2009

Tax - every landlord should NOW be claiming £156 a year for home office expenses

Landlords should NOW be claiming a minimum of £3 per week for running their letting business after a change in the tax rules. Last year it was only £2.

It's always nice to get something back from Gordon and the taxman even if it is only an extra £1 per week.

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The relief is claimed as way as an expense when calculating a landlords expenses in running a letting business.

This amount could be more but a landlord will have to be able to evidence this by ways of demonstrating apportionment of household bills. In his case a landlord can get tax relief for the extra household expenses that you have to pay because you run your letting business from home. Typically these extra expenses include:

  • the extra cost of gas and electricity to heat and light your work area

  • business telephone calls
However, before landlords get too carried away you won't be able to get relief on domestic expenses that you're paying anyway - like your mortgage or council tax. You also won't be able to get relief for expenses that relate to both business and private use - such as your telephone line rental, or Internet access. This is because the HMRC apply the rule of 'wholly and exclusively' when assessing whether an expense is allowable as a deduction.

For full details on homeworking go to the HMRC website.

For details how you can calculate your tax for your rental property for FREE.


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