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 http://www.hmrc.gov.uk/sa/need-tax-return.htm 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!
Jodie
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!
Jodie
0
Comments
-
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!0 -
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 list0 -
@Rock
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.
@JodieR
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.Regards,
Burg0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 156 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 92 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 274 Tax
- 136 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership