Tax on rental income

[FlorayG]

I have no idea what to do but I bet a Dibber can help
I am in full time employment and on PAYE.
I recently inherited my mother's house and have rented it out
I know I need to pay income tax on the rental income but where do I start, how do I know what to do and is it worth having an accountant for an income of about £6,000 a year?

[Caroian]

This page is a good place to start gov.uk/renting-out-a-property/paying-tax

Basically you will need to register for self-assessment, assuming you don't do this already. You then fill in the return online which will basically require copying across details from your P60 for you main employment and then entering the details of the rental income in the relevant section. It is honestly not that difficult and the HMRC helplines are very good if you get stuck with anything. Make sure you keep good, accurate records (a spreadsheet is good) of all the rental income plus all essential expenses related to the rental as these will be the figures you use to complete the return.

[mickey house]

Originally Posted by FlorayG

I have no idea what to do but I bet a Dibber can help
I am in full time employment and on PAYE.
I recently inherited my mother's house and have rented it out
I know I need to pay income tax on the rental income but where do I start, how do I know what to do and is it worth having an accountant for an income of about £6,000 a year?

See more...

Let the hmrc know, and be aware that you can claim tax relief on some of the rental income you receive (repairs to the property, insurances etc).

I personally don't think it's worth paying an accountant for that amount of additional income as many have a minimum charge (no doubt others will disagree).

[catherinesian]

Originally Posted by FlorayG

I have no idea what to do but I bet a Dibber can help
I am in full time employment and on PAYE.
I recently inherited my mother's house and have rented it out
I know I need to pay income tax on the rental income but where do I start, how do I know what to do and is it worth having an accountant for an income of about £6,000 a year?

See more...

Re the accountant, it might be worth consulting not an accountant but a tax advisor in the first year who can put you straight with regards to what expenses are tax deductible and which allowances you can claim. This could save you a fair chunk of money in tax. It used to be you got a wear and tear allowance on rental properties (when I did my tax exams 4/5 years ago) but I know it's changed recently.

[Guest]

If you do decide on the accountant route, make sure they are a member of an institute. I would recommend one of the tax institutes personally- the Association of Tax Technicians or the Chartered Institute of Tax Advisers. Both of these have a public list on their website you can check if they are a member or not.

Reason I say this is that accountant or tax adviser is not a protected job title so any man (or woman!) down the pub can set themselves up offering to act as tax agents with as much information and knowledge as you'd have yourself. That may work out fine but there are charlatans everywhere same as any other trade. At least if they are listed as a member of one of the above they have sat exams and should be keeping up with their continued professional development. They may be pricier but it is worth it for the peace of mind in my opinion. Full disclosure- I am a member of one of the above but work in industry with corporate taxes, not individual self assessment.

[Itsabunthing]

I agree with Mickey House. Register for self-assessment with HMRC and deal with the tax return yourself. I wouldn't bother with an accountant as the notes that are available to help completing the SA are pretty comprehensive and will tell you what is allowed as a deductible.