My wife and I jointly own a house which we rented out during the last tax year. We are just completing a tax return now.
We have calculated our total income on this and our profit after deductions was approximately £1800. We are both 40pc tax payers. I'm assuming since the house is jointly owed 50/50 that we are responsible for £900 each.
On the gov website it stated "You must contact HMRC if your income from property rental is less than £2,500 a year."
I'm assuming we actually will have to pay approx £350 tax each in that case, and it seems to suggest they collect this via your PAYE rather than a self assessment, although it's very unclear.
We haven't yet got an accountant but we have already included deductions for:
- Mortgage Interest only
- All estate agent fees
- Mileage for travelling to and from the property for issues
- Professionally cleaning property before the tenants moved in
- 10% wear and tear of tenants net rent
- Landlords insurance and building insurance
My questions is, we had to buy 3 double beds, 3 chest of drawers and 3 wardrobes before the tenants moved in since we were moving to an un-furnished house. Can we include the purchase price of these items? We also had to do some general repairs in the house to make the house in a rent-able state.
Is there anything I'm missing which could also be deducted and is it worth us getting an accountant to help?