Learn about the services accountants can offer those with property rental income.
Renting out property can be wrapped in two ways: either property that is personally owned is let out, or a property rental business is being run through a company. The former would require income and associated expenses to be declared via a self assessment tax return. The latter would be declared as other business income and be subject to corporation tax for any profits.
Costs can be used to reduce the profit for taxation purposes. There are a bunch of allowable expenses when it comes to property, from letting agents’ fees through to cleaning fees. The list isn’t exhaustive but and an accountant can make sure the maximum is being used to reduce tax costs.
There are also some major changes to the way finance costs can be used as ‘expenses’ and through to 2021 there will be a gradual reduction in tax relief given until it is equivalent to basic rate only.
Losses incurred over previous tax years can be carried forward to reduce tax and possibly profits from other properties. Again, an accountant can decide the best way to do this.
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