HMRC official landlord tax guide

Thank you for that Denise 🙂

We also have a very simple Landlords Tax Returns – 10 most common mistakes page >> https://www.property118.com/landlords-tax-returns-10-common-mistakes/61630/

I expect the HMRC has had a few cases of landlords giving their wife’s a gift, as the wife helps with the admin. HMRC are very good at creating example that are based on what people do wrong in real life.

Interesting use of the word “business expense” and “business asset” for what you can claim and CGT when the new taxation certainly isn’t taxing landlords as a business.

I also like the “keep records for internet use”. I know the theory but in practice for any home run business is difficult.

Thanks

I have no faith that the HMRC echelons that deal with our day-day returns will make good quality and sensible decisions which respect case law if they were to request detailed records of a landlord.

There will never be an exemplar landlord of whom detailed info is requested and no criticism from HMRC arises that would otherwise lead to a fine because they ‘found out’. There is zero latitude, understanding and human contact resulting in a culture of fear.

“These businesses are trades for tax purposes and if you are carrying on this sort of activity you are self-employed”

So not a business despite spending >20hrs/wk and activity scaling with portfolio, having people on the pay roll & paying NI and being on the pay roll yourself …

HMRC call it ‘a business’ everywhere in this but treat taxation in a different way.

They should rewrite this document and change the word ‘business’ for the word ‘trade’ and make it clear the limits of the context.

Consumers of this site should read HMRC vs Ramsay (and so should the writers of the document)

Besides, isn’t wear and tear allowance dead?

If they get hold of you good luck with convincing the HMRC that replacing a broken and rusty garage door, redecorating, replacing a fence blown down in hurricane Katrina and pruning trees are NOT improvements but necessary expenses or you have no tenant and therefore no ‘business’.

Oh, and err, “As your business grows, there are other things that you may need to think about.”

Grow? So it isn’t a ‘trade’? 1,2,3 properties? by turnover? portfolio value?

Hamish

shame we have not got a conservative govt

Expenses : A colleague of mine had an experience with HMRC.

Face to face questions from HMRC are more conversational; carefully crafted to drop you right in it. In plain English, the 2 examples that stick in my mind are:

After a hard day’s painting and fixing you were probably in need of a rest when you got home.

Yes, I picked up a bottle of wine to share with my wife on the way home. It seemed silly to go back out and increase my carbon footprint.

Ok, the use of the car was therefore personal and not business. You cannot have that mileage and that mileage and that …

The other

Ah, your wife/husband came with you and stayed at the hotel too. Must have been a lot to do.

Yes, in the morning we managed to get on top of things. So, she went shopping in the afternoon and left me to it.

Ok, The entire trip was a jolly. You can’t claim the expenses.

I’ll ask for more examples.

Hamish