Tax on a property rented out

[LifeBeginsNow]

Forgive my ignorance but I am having a right week of it when it comes to HMRC. Firstly I found out I have to repay much of my child benefit entitlement for the last 2 years as I'm a higher rate earner (didn't know this was the case) and now I've realised I've not done anything/ looked into property tax for renting out my house.

In my defense, I have been and continue to be very ill and I have totally dropped the ball on this but after flapping at the tax office yesterday about the child benefit, I had an email this morning at 1am from HMRC instructing me to take a course about understanding property tax.

I will do this but can anyone assist in an approximate figure of what the tax will be please? I recieve around £825 a month which is about £50 a month shy of the mortgage payment.

[LifeBeginsNow]

Yes it is landlords insurance we went for and I'm now registered with HMRC (paperwork is apparently on its way).

I'm glad I've got time to look into this and I will start putting money aside each month once I work out the likely figure (which sounds like it could be quite high).

This was all a quick decision and not properly investigated. I was ill and had been for some time then I found out what was wrong and it was serious with a fair bit of rehabilitation time. An opportunity came up to move back into military housing and it would lessen the burden as I dont know how long I'll be able to work for (especially as theres now complications). I would normally try to fully understand these things before committing but we had to rush to get things sorted before my operation. I think it was only about 2 months from the idea to completion!

[bbcessex]

Hi OP,

Essentially, the rent you receive from your property is treated like income.

As previous posters have said, there are allowable expenses and deductions you can apply to the rental income, lowering the amount you need to pay tax on.

There's a lot of info out their.

Presumably as you've only recently let the property, there will be agents fees etc you've paid, which can be offset.

There's a property section on the self-assessment form - you'll need to submit it before 31st Jan 2021 for tax year 19/20.

If there is tax to be paid, it will be calculated from the figures when you submit your return. I always leave my return to the last minute, and pay the tax due as a lump sum when the return is done - I believe if you leave late like i do. My tax due for one property let at £950 per month comes to around £3,500 once I deduct allowable expenses, and I pay in full at the same time as doing that return.

I think there's a way you can add it onto your next year's tax code if you submit early, think maybe before 31st Oct (but I never do!).

Don't panic about the Property course email -
That's automatically generated.

It's a really easy process once you get in the loop, OP. Just realise that rent is treated like income, it's not quite the money spinner that it once was but it's still viable, and you'll be fine.

[longearedbat]

OP, if you are unwell, I would just like to echo what some others pp's have said, and get yourself an accountant.
I used to struggle with self assessment when I was running a business. It is not that difficult, but I found it time consuming and anxiety inducing. I now use an accountant. It is not that expensive, and it's worth it anyway for the sheer reduction in stress.

[Pipandmum]

You pay half the tax owed January 31 and the other half July 31. I am surprised you don't know the tax filing deadlines as it's all over the news for weeks leading up to it. And you can file much earlier - the tax year runs April 6 - April 5, so you could file any time after the end of the tax year.

[PotteringAlong]

My property tax this year for a property rented out for £400 a month was about £250.

You need to fill in a self assessment tax return and they will probably make you back date it for every year since you started renting it out.