Rental Income de-minimus?

JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
A client of mine has always had a full time employment (approx £28k per year) and then a small self employment too but he incorporated in 2009/10 and has now received a letter saying he no longer needs to complete a tax return which I wouldn't normally argue with, but he's got a rental property as well. Now in the past few years the property has made a loss but I thought that it would still need to be declared, however, looking at this page it looks like he would only need to declare income from property if he makes over £2500.
Does anyone know how this works? Are profits under £2500 (assuming rents are under £10k) somehow exempt from tax? If you are completing a tax return for other purposes would you still pay tax on say £1000 of rental income if that's what you made in the year?
Is this a new concession? I've never heard of it before, good thing I've booked to go on the MIP conference this weekend, I'm worried now there's more I've missed!



  • JodieR
    JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
    It's ok, I've phoned HMRC and for those of you who are interested and didn't know already:
    you do still pay tax on small amounts of rental income but if you aren't completing a tax return for any other reason you can just write to HMRC with the figures and pay the tax without completing a return.
    whew, panic over!
  • ROCK
    ROCK Registered Posts: 15 New contributor 🐸
    Tax Return requirement

    Hi, your client will still need to complete a tax return as a company director. The reason you got the letter from HMR&C is that they are aware the client is no longer self employed but for some reason they never seem to realise that they are now a director even though you tell them on a CT41G!

    My advice is just to complete the tax return as usual and they will be back on the list
  • burg
    burg Registered, Moderator Posts: 1,441 mod

    Although it is HMRC policy that they would like Directors of Limited Companies to complete ITR'sthere is no tax legislation that requires this. A director should only complete an ITR if requested to by HMRC or if other circumstances require so such as untaxed income.


    If HMRC's advice is to write in with figures you could follow this. However it would possibly be easier to complete an ITR with the time taken and online filing.

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