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Getting tax advice

Many landlords are facing historically high tax bills because low interest rates are propelling them to making large rental profits for the first time.

Not that I’m complaining!

With everything else in my portfolio heading south. Healthy rental profits have kept me afloat over the last 18 months.

Property Hawk has talked previously about the importance of making an accurate tax return. Even where a landlord fails to make a rental profit, rental losses can be carried forward in subsequent years and help to reduce future rental profits.

There are a number of deductions that a landlord can make against their rental profits. This will frequently reduce a landlord’s tax bill substantially.

The most common deductions made against rental profits are:

1. Interest payments made and other finance costs
2. Repair and renewal costs
3. Management costs including letting agent fees
4. Home office – all landlords have one!
5. Apportionment – find out how you can claim for a proportion of your costs

To find out more about saving income tax on your rental profits have a look at our recent article on ten ways to reduce the tax bill on your rental property.

Improvements to our Property Management software

Property Hawk is all too aware what a pain doing your tax return can be.

We have recently spent considerable time improving our property management software to make calculating your tax return even easier.

Improvements to the tax system include the facility for users to email the returns calculated in the Property Manager software directly to their accountant.

NEW tax services launched

Responding to demand from our users; Property Hawk has teamed up with tax expert Steve Sims author of “Paying less property tax”.

Property Manager users can now use the software to submit information for their tax return to be checked and then submitted to HMRC by a property tax expert.

Users of the Property Manager will save 10% off this usual tax advice bill.

Landlords need to be wary of inaccuracies

Property tax expert Steve Sims warns Property Hawk users about inaccuracies when filling out their tax return.

Most of us would imagine that the taxman would be more than happy to receive an over payment. Not so according to Steve. He points landlords to the results of a recent case:

A self-employed man who filled in his own self assessment tax return for the first time has been fined £1,400 by the taxman for making a mistake in reclaiming overpaid tax.

He calculated he had overpaid £3,000 for the 2008-09 tax year and asked for the money back – the taxman agreed he was owed £1,000 and then slapped on the fine under new penalty regulations for making the error.

The new rules say that taxpayers face fines of up to 30% of tax owed for careless mistakes and up to 100% for deliberate or concealed mistakes.

About a third of a total 9 million self assessment taxpayers claimed a refund last year, according to HMRC.

For more tax advice and to have you tax return and account prepared by a bone fide property tax expert go to our tax advice page.

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