If your property is furnished or even part furnished, you can claim 10% wear and tear allowance on your entire annual rental income. Following changes to the way council tax is now collected on vacant unfurnished properties, has taken away all previous incentives to let properties unfurnished. By adding some furnishings you have a legitimate claim to more tax relief.
It is easier to keep tabs on all your income and expenses from a separate bank account to record all your expenditure, mortgage interest and income. This will provide an easier way to transfer and keep track of the information when dealing with accountants or the Inland Revenue, rather than copying and pouring through your statements from your main account.
You can claim 100% tax relief on the interest portion of your mortgage. If your mortgage is substantial, any losses can be carried forward as your interest drops in the coming years.
If your spouse doesn’t work or pays less tax than you do, you can change the property ownership or part of the property ownership into their name. Tax liability could be significantly reduced.
Landlords tend to only claim on the major repairs and expenses when it comes to their Buy-to-Let.
If you have incurred costs, then you can claim tax relief whether it is telephone calls, bank charges, warranties, professional fees such as accountants, legal fees or consultancy, light bulbs, even subscription fees to property related magazines. Save all your receipts and present this to your accountant.
If your accountant is not advising you on ALL the legitimate expenses you can claim then we suggest getting a second opinion.
Any rental losses should be carried from year to year, so you can continue to offset all your losses to maximise your tax relief. Check to see your previous tax returns to see if they have been carried over and seek advice if these can be carried forward.