How to Report Rental Income On The Self-Assessment Tax Return 22/23

welcome back to tax to you the Practical tax Channel where we answer all of your tax related questions today I'm going to be showing you how to complete the 2223 self-assessment tax return if you have rental income from property to do this I will cover a walkthrough of how to tailor your return that means how to set it up for your own personal circumstances I'll give a demonstration of the entries for rental income including standard rental income holiday lets and rent a room allowance and I'm going to give you an explanation of how the tax calculation Works before we do get into it today though don't forget to like the video and subscribe to the channel for more helpful tax content submit your questions in the comments below and we will endure to get them answered either in the form of a reply or possibly a dedicated video just like this one check out our website using the link below because although I our aim is always to educate our clients as much as possible and share this information we understand that tax can be confusing stressful and time consuming that's where we can step in and help check out the thousands of reviews on trustpilot from clients who trusted us to do just that how do we tailor the tax return for rental income here we are under the tailor your return section of the return that's section three I have skipped past the welcome and the tell us about you because that's simply telling you who can use the online tax return service and then confirming your own details your own National Insurance number your address so you won't need me for that and then we're starting on page one of three of the tailor your return section so we'll work through the questions here you can see the tax year is the 2223 tax year which covers the 6th of April 2022 through to the 5th of April 2023. now my government Gateway is picking up the fact that I had employment in the tax year and of course everybody's situation is different so if you did have employment income or capital gains or whatever it might be you'll need to declare that alongside your rental income but for the purposes of today's example this demonstration I'm purely going to focus on the rental income element and I'm going to declare three different types of rental income because hopefully that will cover a broad spectrum and everyone will be able to relate to that so we'll cover what I would consider normal rental income renting a residential property on a six-month tenancy agreement I'll cover rent a room relief which we'll move on to in a second and I'll also cover uh furnished holiday let's as well so let's start with the first question were you an employee or agency worker in the year to April I'm going to say no despite the fact that hmrc already know in this example that I was an employee of a company was your turnover more than a thousand pound from self-employment where you in a partnership a partnership is typically two or more self-employed people working together but they'll normally have a partnership agreement you would know if you were in a partnership and then here this is the question that relates to property income or rental income however you want to refer to it did you receive income from UK land or property of more than a thousand pounds so I'll say yes below a thousand pound you're covered by an allowance so you wouldn't actually technically need to declare anything although there can be situations where you still want to declare below that 1000 but in this case I have way more than a thousand pound of property income so I'm going to say yes and then on to the next tailoring question which is if you received any foreign income I'll say no if you dispose of any chargeable assets you might need to complete the capital gain section and you can see all you're doing here you're just telling them what types of income you had you're not providing any detail at this point this is purely setting up the tax return so you only end up filling out the sections of the return that apply to you you don't want to be given information about employment and self-employment if you didn't have those types of income so we can work through this that's page one complete and then they'll just be different types of income here so I'm saying no I didn't receive any interest income no I didn't receive any dividends did I receive any pensions annuities or state benefits no just for anyone who does receive um Universal Credit Universal Credit doesn't go in here a lot of people ask me if this is where they declare their Universal Credit no it's not you don't declare Universal Credit on a tax return it isn't taxable income so it doesn't need to go anywhere did you or your partner get child benefit if you're a higher earner if you earn more than 50 000 pound and you or your partner claim child benefit than the person who earned the most actually has to start paying back that child benefit and that's why they're asking you about it here did you incorrectly claim an amount of covered support payments that's becoming less and less likely at this point but obviously if you did accidentally or even fraudulently claim covered support payments that you weren't entitled to you can go back and make a decoration and declare that to hmrc to tidy up any fines and penalties Etc and repay that money did you receive any other UK income for example employment lump sums so this is basically anything that didn't fall into those other categories have you made any income tax losses so income tax losses is always a tricky question but this applies to other UK incomes have you made income tax losses from any other UK income it's quite rare I would say so I'll say no and then am I liable to pay any pension savings tax charges so these apply when you're paying a lot of money into a pension on an annual basis or maybe you've accumulated a huge amount of money in a pension pot you start to get taxed pretty heavily on that so in this example we won't go into great detail on it but I'll say no and I'll move on to page three of tailoring my return did you make contributions towards a personal pension plan so there are different types of pension plans if you're employed you might pay into your employer's pension scheme in which case you get tax relief immediately they take it straight from your salary before you pay any tax and it goes straight into the pension pot okay so that's how you get your tax relief if you pay into a personal pension plan so it's likely that you would have already paid tax on this income it's sat in your bank account but you've already had tax deducted on it you shouldn't have essentially if you're paying it into a pension so what happens is you declare it on a tax return and then hmrc give you tax relief back so they give you 20 of your money or possibly more than that if you are if you're a higher or additional rate taxpayer but you get your tax relief but you just get it in a different way so you would need to declare it if that were the case here I didn't give any money to charity similar kind of situation higher earners higher rate taxpayers and additional rate taxpayers can potentially get additional tax relief if they're giving money to charity and did you or your spouse or civil partner if you were born before 6th of April 1935 do you want to claim the married couples allowance I'll say no you'd have to be 80 odd years old I think to be able to claim that one so it's quite unlikely if you're watching this video do you want to transfer 10 of your personal allowance this is the more modern version of married couples allowance so you used to get additional allowances if you were a married couple so now the way it works is potentially you can transfer some of your personal allowance to your spouse or civil partner if it benefits you as a couple so you'd have to sit down and look at your personal circumstances typically that happens where you've got one person earning and paying higher rate or additional rate tax and one person earning or less or or possibly not earning at all they can transfer some of their allowance to the higher earner and then you can benefit a little bit but just remember you're only transferring 10 so that'll be 1257 pound I think it is at the moment um so not a huge amount of money but they would potentially get tax relief on that so you're talking about a couple of hundred pounds tax relief there so worth looking at do you want to claim other tax reliefs and deductions so again these are less likely but if you do want to claim any of these then you will need to declare so here have you paid any 22 23 income tax refunded or have you had any 2223 income tax refunded or offset by the job center again this is not talking about Universal Credit it doesn't apply here did you have a Tax Advisor no but you would declare it here if you did have you used a tax avoidance scheme I would hope not if you're completing your own tax return but the funny thing with tax avoidance schemes is they all have a reference number hmrc actually know about most of them and you're obliged to declare them to hmrc anyway so it's almost rubbing it in their face you kind of have to tell them hey this is how I avoided tax from you they then go away and and continue investigating that scheme they end up taking you to court and then they win about nine out of 10 cases it's supposed to be so tax avoidance schemes aren't actually as effective as you might might think but it's very unlikely that you're actually using one are you acting in capacity on behalf of someone else you're most likely completing your own return but if you are completing on behalf of someone else you can let them know that at the bottom here and then that if I save and continue that is our return tailored it's set up for our personal circumstances so if I did have employment income or self-employ income and I told them about it you'd get a section in here in this example I've only told them that I have property income so you can see it's generated the UK property income section here and then below that everything else are just the standard questions that everybody will need to answer on a tax return whether you have self-employed income or rental income it doesn't matter these are these are standard and everyone will have to go through them now if this does seem like too much hassle or maybe you need some assistance with your tax return don't forget to check us out using the link below our prices start from 50 pound plus vat for a basic self-assessment which includes one of our accountants preparing and submitting your tax return to hmrc you can book this via our website using the link below now let's move on to completing the property income section of the tax return so here we are we've tailored our return we've completed section three on the right hand side here and now we need to actually fill in the return like I said we're only declaring property income so we've only got the one section to complete but what we're going to do we're going to input some numbers for what I would consider standard rental properties your six month tenancy agreement residential property that lots of people have will do a rent a room relief which covers rooms letting your own property and then we'll do a furnished holiday let as well Okay so we've got three types of rental income that we're going to declare under the property income section so let's scroll down and you can see some sections have already been entered the first section that hasn't is UK property and I'll start by clicking the link to enter property details and we'll start by telling them what type of property income we had like I said there are multiple different types and sources of property income so we just need to work through the questions again we're looking at the 6th of April 2022 to the 5th of April 2023 do you want to claim rent a room relief so I said I'd give this example so I'll say yes rent a room relief typically applies to individuals it can potentially apply to a business like a BNB as well it's up to seven and a half thousand pound you can see that below here and it applies in situations where you are renting a room or multiple rooms within your own home the criteria normally that it needs to be furnished and it cannot be self-contained so you couldn't have an Annex or a one-bed apartment attached to your property that's completely self-contained and claim this allowance but if you're sharing facilities with that person and they just rent a bedroom upstairs then potentially you can claim up to seven and a half thousand pound tax free so it's a pretty generous allowance if you're splitting that income with someone else if you're letting jointly then it's split and you get three thousand seven hundred and fifty pound per person but yeah considerable allowance and good if you do qualify for this but it does replace your expenses and you can see here you've got a bit more information if you do need some additional info on uh rent a room relief it would replace any expenses or anything that you did have for your property so I will say yes to that one in that example we'll assume that I have more than seven and a half thousand pound of rent a room so if yes did you receive rents of seven and a half thousand or less so if I say yes it's less than seven and a half thousand they won't ask me for any more information on it it's just a case of telling them there but I'll say no so I'm going to say that I had ten thousand or eleven thousand from uh rent a room I'm gonna claim the seven and a half thousand and then I'll just just pay tax on the excess of two and a half or three and a half thousand excess and I'll show you how to do that in a second how many properties did you rent out so for this I would always include my rent a room property because I am renting out a room in that property I would include my furnished holiday there and then I would include my in this case I'm saying that I've got one residential property that I let out my standard my normal rental property so I'm gonna say three but of course that's down to your own situation do you have any income from property let jointly so if you are sharing income if you do own property jointly then you'll normally split that income across multiple tax returns or for multiple people just so you know if you are married or in a civil partnership and you own a property together even if your property is technically owned 80 20 maybe you only paid 20 and your partner paid 80 for the property you still as standard you would split the income 50 50. that's what hmrc expect if you're married or in a civil partnership you can make a declaration to hmrc to split it in a different way back to your 80 20 but there's a form that you would need to submit until uh to do that and until you've submitted that form they would be expecting it to be split 50 50. okay I'll say no to that one did all property income cease in the tax year so if I'd sold my property then potentially I wouldn't have this income next year so I can tell them that here but you can see they're reminding me that hey if you've got rid of your property maybe you need to complete the capital gain summary maybe you've made money on that and you'll need to pay capital gains tax so I'm saying no it didn't cease but it is useful because if you do say yes they won't be expecting you to submit information next year because you've clearly told them here so next question did you receive income from UK furnished holiday let's I'm including this in my example below we've got a bit more detail there are criteria to being classified as a furnished holiday let there are also benefits which will come on to but the criteria you need to make the property available for Holiday letting on a commercial basis for 210 days or more during the tax year and you need to actually let it commercially as a holiday let for 105 days or more during the tax year so making it available could be listing it on Airbnb or booking.com actually letting it obviously you've got to take actual bookings for it and you'll notice they put the word commercially in there so you need to be doing it for a profit so if I get to the end of the tax year and I've only actually let it for a hundred days and I say to my friend go and stay in my holiday let for a week so I meet the criteria that's not commercial commercial is trying to make money from it so I need to charge the market rent for it I need to take that money from them so you can't really get around this one unfortunately if you do meet those criteria though then you can say yes to being a furnished holiday let and then the last one is did you receive income from eea furnished holiday letting so again furnished holiday similar criteria all below here but eea is a European economic area so you can look up the list I think hmrc do provide you a list in here in their help sheet of countries that fall within the eea it's most of Europe um but what you'll need to do if you do have say a property in the UK and a property in Spain you need to split those you can't call that all one furnished holiday let business it would be two in the eyes of hmrc I'm not going to declare any income from eea furnished holiday let's I'll save and continue and now we're on to that's that's kind of a mini tailoring for the property income section now we're on to actually entering some figures into that section so we've got to start with we've got our UK furnished holiday let income that's what hmrc want uh to start with here so income from our furnished holiday lettings so if I had 10 000 of income but I also charged a thousand pound let's say uh for cleaning of my furnished holiday let's then I need to enter all of that income it says amount of rent and any income from Services provided so I would enter my 10 000 plus my one thousand and here says actually eleven thousand of income property income allowance so to explain this one property income allowance is one thousand pound or up to one thousand pound you can't create a loss with it and it would replace any expenses so let's say I only had 500 pound of income here I can't create a loss and it's up to a thousand pound so I could input 500 and that'll bring me down to zero profit but I can't input a thousand it wouldn't let me do that so you are limited there so if I go back to my original numbers eleven thousand pound of income I can input one thousand pound here and it would bring me down to ten thousand pound profit however you cannot claim expenses and this replaces your expenses so if I only had five 500 pound of expenses great I'm happy to replace this with the 1000 pound figure because it's going to reduce my profit and I'll pay less tax if I've got more than a thousand pound of expenses and I don't want to use that I want to claim the actual expenses okay so just bear that in mind and you have to do your own little calculation there did you use traditional accounting rather than the cash basis to calculate your income and expenses so Cash basis is a simplified way of accounting so you only account for your income and your expenses as the money is actually spent or actually received so if you think about it if at the end of a tax year the last week of the tax year I let out my furnished holiday layer but the person hasn't paid me yet I gave them a bit of credit and they're going to pay me in a week's time then under the cash basis I haven't received that money so I don't declare it to hmrc and I won't pay any tax on it but under traditional accounting I know I've let out that property I know I'm due that money so I would need to declare it okay and it works the same with expenses as well so did I use traditional accounting I'm going to say no because I'm using the cash basis just be warned there are some criteria again all your criteria can be found in here so you can only have income up to 150 000 from your furnished holiday let's to qualify for the cash basis otherwise you'll be forced onto traditional accounting now we're on to declaring expenses for our furnished holiday let so I'm going to input some figures here so if I you're looking for a category that fits well okay so don't overthink it at the bottom you're provided with an other category so if I did have some insurance I might put some insurance costs in here if I had loan and other Financial costs so loan interest let's say five thousand uh legal fees accountancy fees a thousand pound if I can't find a category then I can just put it in down the bottom here so don't panic you can always use that one now I will come back to this one loan interest and other Financial costs so for UK furnished holiday let's or furnished holiday let's in general your financing costs are allowable 100 allowable so these will get deducted that five grand will get deducted off my 11 000 pound of income and it will reduce my profit figure you get tax relief at whatever rate of tax you pay as a taxpayer if I'm a 20 rate taxpayer if I'm a 40 45 you get the tax relief immediately and effectively it will apply to the highest rate of tax that you you pay okay that is different for your standard holiday let's sorry your standard rental properties that will come into onto in a minute uh but for the purposes of a UK furnished holiday let it's 100 allowable and you'll get that tax relief at the highest rate of tax that you pay as an individual private use adjustments so if up here I'm saying that I've got one thousand six thousand seven thousand seven and a half thousand pound of expenses for the year if I lived or I use my furnished holiday let for 10 of the year I would need to disallow 10 of that income I can't claim if I'm using it privately personally so I need to put 750 pound in here and they would deduct that off of my expense figure okay so that 750 wouldn't be allowed anymore balancing charges electric charge Point allowance zero emission charge allow car allowance and then other Capital allowance these all relate to Capital allowances so where you own assets within your furnished holiday let business and you dispose of those assets or potentially you buy new assets like electric charge points you might be able to claim the full amount in the first year of trading you might have to spread the cost of those assets over multiple years it gets a little bit more complicated so I'm not going to go into great detail on it but all of these relate to owning assets disposing of assets buying new assets into your property business at the bottom we're then provided with a profit figure four thousand two hundred and fifty pound that's my 11 000 at the top minus the expenses that I've declared here is my profit figure of four thousand two hundred and fifty losses brought forward used against this year's profit so if I made a loss in a prior year I can use it against this year's profit so first example let's go through if you had let's say five thousand pound loss in the prior year which I now want to use so I've got 4 250 pound of profit here so I could enter in here for 250 which will bring my profit figure down to zero on the next page I can then carry forward again my 750 that remains from that five thousand okay and then in the next year I'd do the same old offset that 750 against any future profits in this example I'm gonna say the do you know what I only had a thousand pound loss last year so if I take this out completely I'm back to my four thousand two hundred and fifty if I had a thousand pound last year which I declared to hmrc as a loss it brings my profit down to three to fifty okay so that's how your losses work you need to make sure you're declaring them carrying them forward and then utilizing them as soon as possible I'm not going to carry forward any loss because I only had a thousand pound to use do you want to make a period of Grace election period of great selection again details below but essentially if I qualified as a furnished holiday let I met the criteria of 210 days available 105 days actually let in the prior tax year but I didn't in this tax year then I can make a period of gray selection and they'll give me those benefits they'll they'll continue to consider me as a furnished holiday letter even though I didn't meet the criteria this year you can only do it for one year but you'll get that benefit of being able to claim tax relief on your financing costs so it's worth claiming if you can in this case I'll say no you can imagine that was really really useful in covid for example when people couldn't let out their properties they didn't lose their status as a furnished holiday letter save and continue and now we're looking at details for other property income so we've done our furnished holiday there and we're left with the rental income the standard rental income six month tenancy agreement normal rental property and then my renter room I'm renting a room in my own property so we're kind of gonna have to combine those together here and I want to provide a figure for my total rent so let's say I had let's go over higher figure actually let's say I had 30 000 pounds because that's going to mean we're going to have tax payable at the end we already know about the property income allowance okay you only get one property income allowance so if you're utilizing it elsewhere you wouldn't be able to utilize it here as well um and you only get one per person as well so I'll leave that one blank did you use traditional accounting again I'm using the cash basis my turnover is less than 150 000 so I'm gonna qualify for cash basis so I'll say no to traditional accounting UK tax taking off total rents and other income from property this only applies to non-uk landlords so if you own property in the UK but you live abroad quite often what happens is your agents look after the property or your tenant will be told by hmrc that they have to deduct rent sorry they have to deduct tax from your rent before they pay across to you so let's say I own a property in the UK but I'm living overseas I rent it out for a thousand pound a month my tenant might be told hey don't pay him a thousand pound a month pay him 800 pay him 750 and pay the remainder across to us a hmrc so if you don't know that that happens it does happen and it happens when you live outside of the UK but own property in the UK non-uk resident landlords I'll leave that one blank but they would declare any tax that's already been deducted here premiums for the grant of Elise who if you own the Freehold for a property potentially you could sell off the leasehold gain a premium uh for that and you'd have to declare that income here so it's a different type of property income reverse premiums so reverse premiums if I took an interest in a property um and they paid me for taking that interest I don't know any situations where I've known that to happen but I guess it would be quite rare if you're completing your own tax return but those are different types of property income that you could have here and you would declare here so I've got my 30 000 pound of income from property my two other types of property income and then we're on to declaring expenses again so again you're just looking for a category that fixes that fits your expense type repairs and maintenance Insurance ground rents you're going to plug in your figures from here non-residential property Finance costs so this would be for commercial property that it would go in here so potentially again that would be allowable the the financing costs for commercial property but in this case I don't have any commercial property so I'll leave that blank legal fees you could have you could have some accountancy fees that go in here management fees or charges uh cost of services provided including wages I'll leave that one blank and then we've got our our useful other section at the bottom if you don't know where to put those expenses so I've got a total of five thousand pound of property expenses now those property expenses because I've combined rental income from my standard property layer and then my rent a room these expenses have to relate to my standard property let they cannot relate to my renter room because I'm already claiming rental room allowance on those the other option would be actually if you had more than seven and a half thousand pound of expenses for your rent a room you could potentially not claim that allowance and claim the expenses instead in the same way that we've done here but in my example I don't have any expenses under the rental room so I'm going to claim the allowance instead save and continue adjustments to property income so again here what you'll see these all relate to Capital allowances so if you own assets within your business well you might have to make a private use adjustment first of all but then everything below that relates to Capital allowances so again we're not going to go into great detail on Capital allowances here but the question at the bottom we do want because this is where you claim your rent a room exempt amount so what I'm saying is I've got 30 grand of income now that might be 20 grand from my standard property let it might be 10 grand from my renter room so I'm gonna claim the full seven and a half thousand and what would happen is the excess that two and a half thousand would then be taxable but I'll get seven and a half thousand tax-free so really generous allowance save and continue and you can see my adjusted profit for the year is seventeen thousand five hundred pound now that makes sense I've got 30 grand of income I've got five grand of expenses and I've got seven and a half Grand of rent a room allowance which brings me down to 17 500. loss is brought forward we've actually been through this on the furnished holiday let example I don't have any in this case and then lost set off against 22-23 total income this is rare even hmrc are telling you this would be unusual so very unlikely but they'll tell you in here it normally relates to agricultural certain agricultural expenses it's not usually going to apply my loss to carry forward I don't have any losses to carry forward so that I would expect that to be zero and then we have a small section on residential property Finance costs so if you think back to our furnished holiday example it was very straightforward if I spent five grand on financing costs on a mortgage for that res for that furnished holiday there I just claimed it as an expense and if I paid 20 40 45 tax I would get to an 20 40 or 45 tax relief on those expenses if here if for my other my other rental properties I have financing costs like mortgages like loans it works in a different way so let's say I have five thousand pound of financing costs mortgage interest foreign let's say my tax bill at the end of the year is far is 2 000 pound okay what hmrc would do is they would do a quick check to make sure you qualify and then they would say okay you're going to get a tax reducer on this and a tax reducer is at the basic rate of tax so they would say what's 20 of 5 000 pound is one thousand pound what's gonna happen is instead of paying 2 000 pound tax you're going to pay one thousand pound tax okay so you're getting tax relief but you're limited you're only getting it at 20 which is the basic rate of tax now if that's the highest rate of tax that you pay it's the same thing it's the same whether you claim it as a an allowable expense or whether you claim it as a tax reducer here but the people that lose out a higher rate and additional rate taxpayers if you normally pay 40 or 45 tax you're still only going to get basic rate tax relief here so it's a bit of a kick in the teeth to hire an additional rate taxpayers but that's how it works now the box below that unused residential property Finance course now let's say I only had a profit of 500 pound in this year okay and I want to claim tax relief for these residential property costs so five thousand pound twenty percent of that is a thousand pound so I can't use the full amount I would only be able to use 2 500 and I'd have to carry the other two and a half thousand forward okay and then you can use that in future years in this case I'm going to have much more tax to pay because of the amount of profits so I'm going to claim the full 5000 here and like I say I'll get that tax reducer save and continue any other information for other property income so if you did have supporting information or notes maybe that would help hmrc if they were to review your return you can provide them here or you can leave it blank and then we've got a bit of a summary here so you can see eea furnished holiday let's has been left blank in the middle but I do have my UK furnished holiday let's I have 4 250 pound profit but I'm utilizing a loss from the prior year leaving me with 3 250 that I'll pay tax on and for my renter room and for my other or my standard property lacked I've got 30 grand of income five grand of expenses seven and a half thousand of rental room allowance leaving me with 17 500 that I'm gonna pay tax on okay save and continue now we're on to the tailoring or the standard question so everybody's gonna have to answer these won't necessarily relate to the property income section so I'm gonna go through these a bit of speed essentially here you're just declaring that this figure is correct do I have any underpaid tax from earlier years is this figure correct zero yes I don't have any underpaid tax similar question again yes I'm happy that this is correct check your dates check your coding notices and then this one I'm confirming the or I'm entering a zero here if the amount of outstanding debt included in my tax code for 22.23 there was no outstanding debt in my tax code you would know from looking at your coding notice but if there's nothing you can enter zero overpaid tax now I'm not going to have overpaid tax I'm going to have a tax liability so I'm going to say not applicable but you can select to have your overpaid tax paid to someone else or back to yourself continue and you'll be able to input your bank details you can tell them you don't have Bank details and they'll send you a check if you really want one but I'll say this is not applicable because I'm not going to get a tax refund if you're submitting your tax return by the 30th of December and you owe less than three grand again I don't think that will apply to my example you can have your tax collected by this year's tax code okay I'm going to say no to that I don't want it to be collected via my tax code and then again at the bottom if you're likely to owe tax for the current tax you're not the tax return that we're submitting here the current tax year then you can also have that reflected in your tax code as well so I'll say no to those and I'll continue adjustments adjustments are very rare at this point I can't think of an example of a submitting thousands of tax returns where I've actually had to do this it does become a bit complicated um if you don't have any adjustments you just leave them blank which is very likely and you continue any other information so at this point this is general information relating to your tax return doesn't have to relate to property income section but you can provide additional information first of all they're asking us does this return contain provisional figures provisional figures if you don't have information and you're approaching the deadline sometimes it's better to just submit something an estimate to hmrc but they would be expecting you to come back and make a correction I believe if you say yes you'll actually have to tell them when you're going to come back and why you're using a provisional figure I'm going to say no these are final figures I'm happy with them and then I've got a bit of white space again general information and attachments below do I want to attach anything you can do that would support your tax return and the figures on it save and continue and we've actually completed the tax return there we've completed the property income section and all of those standard questions that you'll have to answer and you can just check here that everything has been completed you'll have the blue entered label next to it if that is the case now just remember what we've demonstrated here is how to enter income details of property income figures to your tax return to get to this point of course you need to work through all of your receipts all of your bank statements and you need to decide which income needs declaring which expenses are allowable and which are not of course that in itself can be difficult so if you want one of our agents to help you with this you can book via the link below then simply scan or send photos of your receipts and we'll take care of the rest we'll also be able to advise if there are any additional expenses or allowances that you should be claiming to further reduce your tax bill again follow the link below for details now let's take a look at the tax calculation now in order to move on to view your calculation you can either do this on the right hand side by clicking on number six view your calculation or once you've finished checking that all of these have been completed and you can drop back into any sections you're unsure about once you've finished you can click next at the bottom and we're on to the summary page of the calculation now this is telling me that the total amount due for the 22-23 tax year the one that we were looking at is 636 pound it's also telling me that I have zero to make as a payment on account for the following tax year payments on account will normally apply if your tax liability is more than a thousand pound so if this figure was let's say two thousand pound hmrc would ask me to make payments on account as well and your payment on account is always going to be 50 of the liability up here so I'd have to pay a thousand pound here and down here by July as well they'd put a thousand pound in so in this case because my liability is below a thousand pound they're not worried about any payments on account so that's the full amount owing by the 31st of January 2024. now to see a detailed breakdown of this because that doesn't tell you how your tax has actually been calculated a detailed breakdown you at the bottom you can click on view and print your full calculation so this is the detailed calculation where we can see a breakdown of all the different types of income if you did have other types of income employment income self-employed income capital gains it would all show in here and then you'd get a breakdown of any income tax that you have to pay but also National Insurance on certain types of income earn income normally so typically that's going to be your employed income would be the best example self-employed income as well in my example I've only got the property income so you can see total property income 21 750 you can see my 1 000 pound loss I'm getting income tax relief on my 1 000 pound loss that was being bought forward I've got a personal allowance of 12 570 gives me relief of 13 570 and then I've got income tax to pay on eight thousand one hundred and eighty pound now because I'm I've only got that income here that's going to fall in the basic rate tax category so I'm going to pay 20 tax if you were a higher rate taxpayer you had more income you had more income from rental property or other sources then you might have to pay additional rates of tax here and then you can see here I have total income tax due of 1636 pound but this is my tax reducer hmrc are saying well you paid five thousand pound of financing costs you can have basic rate tax relief on that which means you get one thousand pound of tax relief that's why I'm only paying 636 pound in tax and again you've got your breakdown of when you'll need to make those payments below you can print this calculation if you want to I'm also presented with the option of saving and printing the full return here although I never normally print the return at this point because you'll always have access to it as you log back into your government Gateway account you'll have to make a declaration before you submit your return that you are happy that you've declared all covered support payments and they're all the information on your return is accurate to the best of your knowledge and from there you can then submit by clicking submit and entering your government Gateway ID and your password again so that was how to complete the property income section of the self-assessment tax return hopefully after viewing this video you should now be able to tailor your tax return so it is set up for your personal circumstances in particular where you have property income you should also be able to complete the property income pages of the tax return and hopefully you will understand more about how the tax calculation Works don't forget if you're having any trouble at tax to you we provide an easy to use self-assessment service and we'll be happy to help whatever your situation just follow the link below that is all for today don't forget to check us out at tax2u.co.uk And subscribe to the channel for more helpful tax content thank you for watching see you next time

Channel: Tax2u Limited

Views: 79,953

Keywords: how to declare rental income, how to report rental income, rental income tax, how to report rental income on a tax return, how to declare rental income on a tax return, how to declare rental income on a self assessment tax return, how to report rental income on a self assessment tax return, uk tax for landlords, rent a room relief, furnished holiday lets, self assessment tax return 22/23, tax for landlords, uk landlords

Id: ih0bjrpuCNc

Length: 43min 26sec (2606 seconds)

Published: Tue Jun 06 2023