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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4715
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have two related Self Assesment/Rental-Income questions:

Customer Question

I have two related Self Assesment/Rental-Income questions:
1) I pay for all utilities, TV license &BroadBand costs
for my rental property: in which section can I claim Tax allowance for this expense?
Is it in or ?
2) I have paid the 1st and 2nd Payments on a/c for Tax yr 2013/14 last yr.
My Balancing payment is coming out high, how do I know that my payments on a/c have been taken account of?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

Answers to your questions -

You should complete supplementary pages SA105 UK property.
If your property income before expenses is £79,000 and your rental income is from furnished letting then youu add up your expenses and put them under property expenses in box 29 - other allowable property expenses.

You can check your current status of amounts owed to HMRC for tax year 2013-14 by logging into your account using your user ID and password ***** go to self assessment and view account by tax year.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.

I am submitting my Tax return online.

My question is: My expenses include cost for (utilities, TV license &BroadBand) for my rental property – where do I enter the sum of these expenses?
Is it in
Rent, rates, insurance, ground rents etc
Or
other expenses

My property income before expenses is below £79k.

Expert:  taxadvisor.uk replied 1 year ago.
Ash, thank you for your reply.

Please enter them in other expenses.

I hope this is helpful.
Customer: replied 1 year ago.

I have paid the 1st and 2nd Payments on a/c for Tax yr 2013/14 in yr 12/13.

My Balancing payment for this yr is coming out high, how do I know that my payments on a/c have been taken account of?

This yrs calc show no demand for payments on a/c. How do they decide when they are relevant?

Expert:  taxadvisor.uk replied 1 year ago.
Ash, thank you for your reply..

There are many reasons why HMRC may deem no payments on account are required.
These are covered in HMRC manual under salf303 here
http://www.hmrc.gov.uk/manuals/salfmanual/salf303.htm


I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

Customer: replied 1 year ago.

My original question is my Tax demand for this is high. I have paid > £3k for payments on a/c last year - i would have expected my Balancing Payments to be a lot lower this yr as a result - How can i be sure the payments on a/c already paid have been deducted from this yrs calc?

Expert:  taxadvisor.uk replied 1 year ago.
Ash, thank you for your reply.

I have already answered your question...
Once you complete and file your self assessment return, the system will update your account.

The figures you see on the screen at present do not take into account any payments you may have made towards amounts due on these dates or any other amounts which may be outstanding or becoming due.

You will normally receive an SA300 Self Assessment Statement near the due date telling you how much to pay.

This is my previous answer ..

You can check your current status of amounts owed to HMRC for tax year 2013-14 by logging into your account using your user ID and password ***** go to self assessment and view account by tax year.

I hope this is helpful.
Customer: replied 1 year ago.

With the on line system at the end of entering all the data does the calc and immediately states the amount of Tax due plus the payments on a/c due by Jan 2015. A SA300 statement is not sent.

Expert:  taxadvisor.uk replied 1 year ago.

Ash, thank you for your reply.

What you see on your screen will be processed once the self assessment has been successfully submitted.

The system will update your self assessment account from this information and this could take a few days.

As I suggested previously, you should log into your self assessment account in a week's time and hopefully your account will be updated for payments already made on account.
SA300 statement is not sent at the same time as your submit your tax return.

I hope this is helpful.

Customer: replied 1 year ago.

Thank you for your patience.

I have logged into my Tax a/c and checked for the year ending 5th Apr 2014.

It states an amount in the Tax row equivalent to the sum of the 1st and 2nd payment on accounts.

If I understand you correctly, this amount will change (in a few days) once I submit the Self assessment successfully online. It will then reflect Tax less the 1st and 2nd payment on accounts. Is this correct.

Thank you.

Customer: replied 1 year ago.

Although you said (utilitys+TV license+BroadBand) sould be declared under other expenses: Notice the comments supplied on the HMRC web site:

Rent, rates, insurance, ground rents etc
Include: any rents you pay under a lease of a property that you let
business rates,Council Tax,water rates,ground rents,insurance for both the property and contents, costs of services you provide such as gardening, porterage, cleaning,
communal hot water, etc

Other expenses:
You can only deduct necessary expenses (those that each person doing exactly the same job as you would have had to pay out) and they have to have been paid out in doing your job, not getting you to a position where you could do your job. If your PAYE Notice of Coding shows an adjustment for these expenses for an earlier year please contact HM Revenue & Customs (HMRC).

Clearly the Rent, rates, insurance, ground rents etc is the more appropriate place to place the expenses, would you now agree?

Please confirm.

Expert:  taxadvisor.uk replied 1 year ago.

Ash, thank you for reply.

I asked you if your rental income is below £79,000 and you confirmed that to be the case.

This is an extract from the notes that accompany supplementary pages SA105 - UK Property (Page UKPN 9)

Property expenses

If your total property income in the year, including furnished holiday lettings income, before expenses is less than £79,000, you do not have to list expenses separately. Instead, put total expenses in box 29.

Generally, you can claim the running costs of your business as a deduction but you cannot claim as property expenses any capital costs. These are expenses relating to the purchase or sale of, or improvements, additions and alterations, to land, property, equipment, furnishings or furniture.

Here is a link to SA105 notes for confirmation

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/354379/sa105-notes.pdf

As far as payments on account and balance outstanding goes, please check your account in about a week's time and hopefully it would reflect the correct position.

I hope this is helpful.

Customer: replied 1 year ago.

I am still NOT clear.

My issues is running costs (i.e. utilities, T V licence, Broad Band) These are not capital costs as it has nothing to do with expenses relating to the purchase or sale of, or improvements, additions and alterations, to land, property, equipment, furnishings or furniture.

These (i.e. utilities, T V licence, Broad Band) are cost of services provided!

Previously you had said I should declared these in other expenses – where do I now put – you say put it in Box 29 – this is meaningless when you do it online. There is NO Box29 online!!

Please make clear where these expenses go?

Thanks.

Expert:  taxadvisor.uk replied 1 year ago.

Ash, thank you for your reply...

Please look for a box with expense heading that states other allowable property expenses on your return. I use commercial software to file my client's tax returns and these box numbers are in line with box numbers used by HMRC on their forms. I notice HMRC does not use box numbers if you use their software for filing tax returns online but use Box numbers for paper returns. Here is link to the form itself and you will relate it to online form

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/354368/sa105.pdf

On your online form -
Within the section dealing with Details for UK property, go to that section stating "Expenses for other property income" and enter expenses in the box that reads "Other allowable property expenses".

I hope this is now clear to you.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

Customer: replied 1 year ago.

Thanks for the info, however i am back to my original question. The help pop up provided for this entry is:

Other allowable property expenses:
You can only deduct necessary expenses (those that each person doing exactly the same job as you would have had to pay out) and they have to have been paid out in doing your job, not getting you to a position where you could do your job.

The help pop up for

Rent, rates, insurance, ground rents etc
Include: any rents you pay under a lease of a property that you let
business rates,Council Tax,water rates,ground rents,insurance for both the property and contents, costs of services you provide such as gardening, porterage, cleaning,
communal hot water, etc

Do you still think (utilities, TV licence etc...) are Other allowable property expenses?

Expert:  taxadvisor.uk replied 1 year ago.

Ash, thank you for your reply.

I have given you a link to SA105 notes and also copied extract from these notes. HMRC is clear.. if your property income is below £79,000 you can group all allowable expenses and show them under the heading "Other allowable property expenses".

I have filed many tax returns for clients and used this heading to group all allowable property expenses. I have never had any issue with the tax man.

I know what the pop up help notes state..

I do the same for my own tax return....group property expenses and show one figure under other allowable property expenses.

I hope this is helpful and comforting. You could discuss the pop up notes forever.

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