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Paramount Properties

3 common questions about landlord tax returns answered

It’s that dreaded time of year again, where our owners are besieged with questions from well-meaning accountants, asking for receipts and invoices and information on all transactions that have occurred in the last 12 months! Yes, it’s tax return time!!

There are some really common questions we see year-on-year which hopefully we can help answer in one place for you!


1. Why don’t the fees and rental income amounts tally?

Whilst rent amounts in each month are fairly easy to allocate, you have to remember to look at the frequency and when your lettings/management fees were paid.

For example, most owners will look at a monthly rent of £1,000 per month (£12,000 per annum), and expect to submit fees equivalent to this income.

If your tenancy started in March 2022 as an example, you’ll be putting through income for April 2022 - March 2023 in this years tax return. The letting and management fee however would have been entirely paid in March 2022, and therefore would sit in last year's tax return.

Likewise, if your resident is not paying monthly, and makes a lump sum payment you need to look at when this payment was received. It can over or under inflate rent depending on where in the 12 month cycle it was received. If received in advance at the start – it will not be considered evenly spread for the purposes of the tax return.

If you would prefer to have fees and rent offset monthly in real time, we do now offer the ability to spread payment over the course of a tenancy for an additional 1%+vat, which in this example would equate to £10+vat per month.


2. Will I automatically receive end of year statements?

Not all of our owners require this service so we don’t automate this. We have a lot of overseas owners who are working to different periods, and owners who don’t want or need to receive this!

If you do want to receive these without having to ask, then please let us know and we can make a note to send these annually.

Why not opt for our full management service? This will centralise all costs relating to your property for repairs and maintenance, meaning a smoother tax return at the end of the year! Management fees are (you guessed it) tax deductible after all!

3. What items are tax deductible?

Changing on a yearly basis, it can be hard to keep up with what you can and can’t deduct for now.

The best answer is – seeking independent advice on this should ensure nothing is missed, but WHICH? have published a guide only this month offering the most recent in confirmed deductible items – take a look here: Expenses and allowances landlords can claim.

If you have any questions, please don’t hesitate to contact our accounts team at ClientAccounts@paramount-properties.co.uk

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