New pensioner Landlord – How do I pay rental income tax?

New pensioner Landlord – How do I pay rental income tax?

11:05 AM, 12th April 2022, About 2 months ago 2

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We are accidental Landlords having failed during Covid years to sell the flat we moved from in DEC 2019. We began renting on the 1st Nov 2021 and need to pay tax to the DWP/HMRC.

Does the letting agent inform DWP/HMRC and then my wife and I get a letter from them with a Unique Tax Reference UTR number?

Being joint owners do we each get to pay for 1/2 income less 1/2 expenses or can we pay the whole with a single response?

Help would be much appreciated with this, as I can use Which.co.uk system to send report/s and save account fee or double fees.

Many thanks

Cyril



Comments

by Judith Wordsworth

12:39 PM, 12th April 2022, About a month ago

Whose name is the tenancy agreement in? Single name or joint name? If rent going into a joint bank account then can split 50/50 between you both. Or think you can elect % split if one of you is a higher tax earner. Are the agents fees taken out of the rental income? It is your responsibility to contact HMRC not your letting agents unless you live abroad when the agent has to deduct 20% and send direct to the tax man. On your tax return which will be sent out mid April ish, if you don’t get one give HMRC a ring and explain your situation, they are really helpful. The short version has a section “income from property”. Put the rent received there, put the allowable expenses in the box (lots you can claim etc buildings insurance, letting agent fees, repairs & replacements, electric and gas landlords certificates, etc etc. Deduct one from the other and that’s your taxable profit. If you get the long version it also asks how many properties you rent out as well as the info needed above. There’s boxes to put pension income, bank interest etc etc.
With just one rental property not really cost effective to use the services of an accountant even though their fee can be offset against your tax liability.
Lots of info online too.
Hope this helps

by northern landlord

14:45 PM, 12th April 2022, About a month ago

Always best to split income 50:50. This means two tax forms but that way you each get a basic allowance meaning that you can earn £25,140 combined as a pair before you pay any tax (rather than just £12,570 before tax if a single person claims all the income). You can chat online with HMRC if you like that sort of thing, or you can write or phone, address is Self- Assessment HM Revenue and customs BX9 1AS or phone 0300 200 3310 (might take while to answer). Generally once you get in the system you will get forms automatically. Judith is quite right nobody informs HMRC that you get rental income (unless it is somebody with a grudge against you).
I assume that you and your wife never used to get a yearly tax form before you retired. The standard shortform (SA200) you get sent has a space for property income. You can’t download this form but you can download a generic tax form, If you download this, it does not have a property income section, you have to download a separate sheet for that. Might just be best to just keep 20% of your rent income safely aside against possible tax and just to write to HMRC with national insurance numbers (and UTR’s if you have them) and they should sort forms out for you.


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