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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have questions regarding rental income. I have rented my

Customer Question

I have questions regarding rental income. I have rented my property in February 2011 and left the country to work abroad. I am now back and the property is not rented anymore since April 2015. I have not paid the rental tax on it. I am seeking for advice
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
You are liable for UK Income Tax on these rentals. However, if you are an EEA citizen, you are entitled to the usual Personal Allowance to offset this income stream. Only net income need be declared. Here is a list of the most common deductions which can be set against rentals [source Which]:
'The most common types of expenses you can deduct are:
Water rates, council tax, gas and electricity
Maintenance and repairs to the property (but not improvements)
Contents insurance
Interest on a mortgage to buy the property
Costs of services, including the wages of gardeners and cleaners (as part of the rental agreement)
Letting agents' fees
Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
Accountant’s fees
Rents, ground rents and service charges
Direct costs such as phone calls, stationery and advertising for new tenants
The expense should be incurred wholly and exclusively as a result of renting out your property.'
With luck this may reduce your taxable income to below the personal allowance level.
You will have to make your peace with HMRC as you should have been making self assessment tax returns to declare this income. HMRC may charge you interest on late paid tax and possibly penalties also, but your are still well within time for the 14/15 tax year declaration limit.
There is another point to consider and this may make dealing with HMRC a tad easier. When you left to work abroad did you complete a form P85 and send it to HMRC? If you did not you should do so immediately, fortunately there is no time limit on its submission, it is available on the web and can be filed on line. On receipt of this form HMRC will class you as non resident for the tax year after your departure date 11/12 and furthermore divide your year of leaving (10/11) into two portions, one resident and one non resident. Advise HMRC of your return and the reverse procedure will take place.
At present Scots and English tax law is the same, but as you probably know this is one of the areas where the powers are likely to be devolved to the Scottish Parliament.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.