If you rent out property then you have an obligation to report the property income and expenses to HMRC (click here to do so)
You will need to tell HMRC that you are receiving income from property by January 31 after the end of the tax year in which the income is received.
You may need to complete a Tax Return, in which case HMRC will notify you of the need to file a Return.
However, if you have PAYE earnings, you may be able to have any tax due collected via an adjustment to your PAYE code.
“Even if you make a loss it is to your advantage to report this to HMRC,” said Peter Way-Rider, tax manager at Ellis & Co.
“Without reporting the rental losses, you are losing out on being able to set these losses against future income from property, meaning that you will pay more tax than you should.
“So if you register these losses now, you will be able to take them forward and offset them in future years if profits are made,” he added.
For further information about property income or any other tax matter contact Peter Way-Rider on 01244 343504.