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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2 comments:

  1. UnknownMay 10, 2013 at 10:36 AM

    I am just looking at Registering for Self Assessment for the first time. I have a single property that has a 'Consent to let' (not Buy to let).

    As the mortgage is in Joint Names with my wife, we both have to register and submit tax returns. We have to claim/declare

    My/Our Question:
    We use a Managed Service with our Letting Agent, Can we still claim Home Office Expenses?
    If so, can we only claim half of the £3 pw each or could be both claim the full £3 pw each?

    ReplyDelete
  2. The EditorMay 10, 2013 at 7:24 PM

    Hi Tristen,

    My thoughts would be that consent to let or buy-to-let makes no difference from a tax point of view. You are still running a rental business. I would say that the expense could be claimed by each party but the honest truth is I'm not an accountant so don't truthfully know. You could try posting the question in our forum after first registering.

    ReplyDelete