Calculation Of Your Profits Or Losses On Rental Income

In order to work out your overall net position for tax purposes, you will need to:
1) Add up all of the income received in the tax year from letting out your property(ies)
2) Add together all of your allowable expenses
3) Deduct these expenses from your income
This gives you a net position for tax purposes and all of the above information should then be included on the land and property pages of your self assessment tax return.

If you complete your tax return electronically then the submission deadline and tax payment deadline is 31 January after the end of the relevant tax year. If you have not already done so, you will need to register for self assessment and create your own personal tax account with HMRC (deadline is 31 October).

If you do however have a loss for rental purposes, this still needs to be reported on your tax return as above. However, the loss can be offset against other rental profits if you have several properties that are showing a profit. If there is no offset of the loss available, then it must be carried forward on your tax return (by making the claim in the land and property pages) and offsetting them against future rental profits in the following tax years.

If you would like our help to understand the implications in more detail for your specific situation, call us today on 02394 003600 or contact me on vicky@babcocktaxservices.co.uk.

 

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Posted in Tax & Accountancy.

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