Are you looking for tips and ways to increase your financial health? Having diversified sources of income can be a good idea to pursue your dream instantly. In the real estate industry, we can find several options to grow our wealth as this is a lucrative source of income for the individuals who look upon investing in this industry or own a house that they aim to let for people looking for a house as tenants. It is important to learn what is rental income and the relevant expenses to develop a basic understanding.
It has been observed that the tendency of investors and other relevant individuals is moving toward building a robust property portfolio and this allows them to earn hefty rents. Before moving further in the discussion, learn what we have got you covered within this article. You will have a clear understanding of rental income and expenses that you are allowed to claim against your rental income.
What Is Rental Income?
It is not easy when you aim to step into the real estate industry and aim to leave a permanent mark there. To be a property landlord can be tough. You are required to strictly follow the rules about your rental income and expenses. This will give you the satisfaction that you are not heading for anything illegal or against the law. Landlords often seek professional advice to be on the top and to manage the rental income tax and expenses well.
There are a few things to consider while you are allowing tenants to live in your home. wondering what is rental income? The rental income refers to the amount of money that you receive as a landlord after you rent out a property you own. While making the tax filing you are asked to add all the income sources from which you draw the money. These details work as a support for HMRC to calculate your income tax.
Are you looking for a professional who can help you to identify your rental income and expenses? Get in touch with one of our experts at Accotax to get intent help. Give us a call on 02034411258 or request a callback.
Expenses that you Can Claim Against Your Rental Income
It is the most advantageous for seamless working that you hire an expert tax advisor who can help you to sort out self-assessment tax returns related to your rental income. The experts know smart ways to reduce your tax bills being within the limits of legal rules and regulations. The ins and outs of your rental income will be explained well by the experts as well. We have listed a few expenses here that you can claim against your rental income. This will help to reduce the amount of money you need to pay as part of your tax bills to the HMRC.
- The Fees of an Agent
- Repairing Expenses of the Rental Property
- Motor Expenses
- Office Expenses
- The Fees Of A Legal Professional
The Fees of an Agent: One of the big challenges is to find suitable tenants as per your requirements when you are a landlord. This can not be done all alone and you will definitely need professional help for this purpose. The help and guidance of a real estate agent are required at this stage who will advertise your property and this will lead to finding a suitable option for tenants.
Now the amount of money you pay as the agent’s fee can be deduced from the amount of rental income. This will help to reduce your tax bills.
Repairing Expenses of the Rental Property: Expenses like repairing that you spent the money to repair the property to make it up to the living standard can also be deducted from the rental income. Capital expenditures are not allowed to include in the deduction list.
Motor Expenses: There are several cases in which you will need to rely on the use of transportation when you are trying to run the real estate work effectively. It is allowed to add the motor expenses to your claim list. A few essential points to consider while you are planning to claim motor expenses include being careful that expenses like motor repair and fuel. As per the instructions of HMRC, such expenses are already deducted and entertained well.
Office Expenses: In case you are managing to do your job from a home office. Home expenses are allowed to be deducted from business expenses. You will be able to calculate business expenses and this depends on the space of floor you cause to work from home. You can even add the time like your working hours when you are working from home.
A home flat rate can also help to identify the exact calculations. It is suggested to take help from an expert accountant who can figure out the exact calculations for you.
The Fees Of A Legal Professional: It is allowable to make a claim for professional fees when you are a landlord. In this industry, you will be required to seek help from the relevant professionals often. You can add the amount of money you spent to pay their fees. It is good to be considerate about these expenses as not all of them are allowable to make a claim. It is better to reach out to a reliable accountant to make it work for you.
The Bottom Line
Now that you have gathered the basic information about what is rental income and the relevant expenses, the discussion can finally be wrapped up. It is not easy to be a landlord to handle the challenges added to his role. However, the best is to always seek a professional’s help to figure out the exact calculations of your rental income expenses that you can claim later. As not all the expenses are allowed to add to that claim list.
We hope these grew minutes of reading will help to handle your income and expenses well as a landlord!
Speak to one of our qualified accountants to get your queries answered swiftly. We are available from 9:00 am – 05:30 pm Monday to Friday. Reach out to us today!
Disclaimer: The information provided in this article about what is rental income including text, images and graphics is general in nature. It does not intend to disregard any of the professional advice.