Reasonable miscellaneous costs for landlords tax returns

by Readers Question

4 years ago

Reasonable miscellaneous costs for landlords tax returns

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Reasonable miscellaneous costs for landlords tax returns

I’m just in the process of filling in a tax return for the first time and understand I can claim miscellaneous costs for such things as phone calls administration cost etc. As this seems to be a subjective calculation, (I’ve spent hours on the phone interviewing tenants and a similar amount of time in front of the computer keeping accounts up to date), could someone advise me, (rough estimate), as to what would be considered acceptable landlord miscellaneous costs and how much they have been able to claim for in the past? Reasonable miscellaneous costs for landlords tax returns

Thanks in advance.

Paul

Comments

Mark Alexander

4 years ago

Hi Paul

Whilst I'm sure you will get lots of useful tips here such as claim for use of home as office, mileage, reasonable apportionment of telephone bills etc. I do strongly recommend that you seek professional advice. My experience has always been that I receive a good return on investment in this regard. Please see >>> http://www.property118.com/landlord-tax/
.

Agree with Mark.

On an accreditation course I was delivering to Landlords about 2 years ago when dealing briefly with tax a Landlord commented that there is a £200 allowance which can be claimed in self-management. I assume this means £200 in monetary value, so an allowance claimed of up to £1000 at basic rate.

Obviously there is a big set list of allowances that can be claimed, but when you take the professional advice advised by Mark ask them about this. Whenever I have mentioned this on subsequent courses other Landlords have said they are aware of it.

Shakeel Ahmad

4 years ago

If the property is not owned by a limited company i.e. you are a sole trader (not a partnership) you will be paying the £200 to yourself. This would not make a difference as you will declare your income as either providing admin or rental surplus.

In a partnership or a limited company the situation could be different. In tax one size never fits all.

Iain Rankin

4 years ago

As a tax accountant and a Buy To Let landlord, I am genuinely alarmed at talk of claiming self-management allowances and the like. Property tax rules change every year. Unless you are dealing in this area on a day to day basis, you must seek professional advice, ideally from a property tax specialist.

Iain

I couldn't agree more and endorsed that advice as given by Mark.

I am a million miles from being a tax expert and merely passed on what I had been told and had no idea existed. If it doesn't fine, if it does claim it. All I can say is on a course last November a Landlord again confirmed to me he was doing this.

Shakeel Ahmad

4 years ago

If you try & claim for all & sundry and you were not allowed to claim you may just upset the revenue.

I am a firm believer that be reasonable & do not be greedy to claim every penny even though you are legally entitled to. Leave this for the tax experts if you can afford them & you feel and accept that the money saved from tax has gone to the tax accountant.

Richard Kent

4 years ago

Reply to the comment left by "shakeel ahmad" at "07/01/2014 - 12:33":

Shakeel Ahmad,

Both your comments are correct.

Paul (who asked the original question and presuming you are a sole trader wishing to charge yourself for the cost of your time!), you need to steer clear of making such claims as a Sole Trader as you will draw unnecessary attention to yourself from HMRC.

Charging yourself 'consultancy fees' as a sole trader is what you wish to do and it's not allowable.

Spending hours on the phone is not an allowable expense

VERY GOOD TIP- However, use of part of your house as an office and use of telephone etc are allowable expenses! Using your car to visit your tenant is an allowable expense!

I hope you are now seeing some scope for claiming for these expenses? E.G- CAR MILEAGE, TELEPHONE, OFFICE ELECTRICITY, NEW COMPUTER FOR OFFICE.

Also look at the phrase "Arms length transaction" on the internet to give you some idea of why certain things are not allowable expenses.

Richard Kent

4 years ago

Reply to the comment left by "Mark Alexander" at "07/01/2014 - 09:49":

Paul-

And the best advice from this thread is obviously from Mark Alexander...."I do strongly recommend that you seek professional advice"

In other words go and book an hour with a local Accountant who will explain your position in detail.

If you attempt your accounts yourself you could amongst other things unintentionally do the following....

1. Make a claim for something you should not have
2. Not claim for something you are entitled to

Information from the internet is often misleading and hard to grasp if you don't speak accountancy language.

I hope this helps.

Rob

4 years ago

I dont bother, the amount of hassle involved keeping tabs of milege and working out percentages of used gas and elec and telephone calls etc...for using your home as an office plus petrol receipts and paper clips the amount is so small whats the point. My accountant advised the same, plus why risk drawing attention to yourself over a such a small claim that would take up hours of your time administrating.

Richard Kent

4 years ago

Reply to the comment left by "Rob walsh" at "07/01/2014 - 16:46":

Hi Rob,

Thanks for your comment.

I have to disagree with your accountant.

If you claim mileage rate for using your personal car you will be surprised at how much it can amount to.

For example claiming for 1000 miles of business use at 45p a mile is £450 per year.

This presumes you will calculate using the Mileage Rates offered by HMRC rather than using your car repairs and fuel receipts:

http://www.hmrc.gov.uk/rates/travel.htm

Also claiming between £20 to £40 a month as an estimated cost for using part of your house as a business is very reasonable and never gets questioned by HMRC.

Likewise claiming £10 a month for mobile phone usage is very reasonable depending on the size of your business.

You may not be claiming your full entitlement. Therefore my advice is seek a second opinion from another accountant.

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