If there is one certainty that has come out of investments over the last few years, it’s that property pays well.
Unfortunately, over more recent times, this task has been getting more and more difficult. Various legislation has come into play which has made life as a landlord tough to say the least, and it’s meant that some are starting to consider other forms of investment.
While it’s true that the game has been made harder, there are some tips you can implement to give you the best chances of maximising your property profits. Some of these might involve software choices like BTC Software, which can make the job of filing your taxes a little easier, while others will revolve more using strategy. For the purposes of today we will now focus more on the latter and show how you can get the most from your property portfolio.
Do You Need to Declare Your Rental Income?
First and foremost, you need to find out if you even have to declare the income from your rental properties. After all, from 2017, the government introduced something going by the name of the £1,000 property allowance.
Put simply, any landlord earning less than £1,000 from property doesn’t need to declare it to HMRC.
The grey area comes with those that are earning more than this. While it does mean that the first £1,000 of your income is tax free, it also means that you can’t claim expenses from the sum. As such, find out if your expenses exceed the £1,000 amount.
The Power of Carrying Forward Losses
As we all know, life as a landlord can be turbulent to say the least. One year you might have a tenant who pays consistently, while the next your property might be sat empty for the most part.
It means that it’s not unusual to have losses in some years. This is where some shrewd accounting practices come into the picture, whereby you will start to carry forward previous years’ losses. Particularly for those landlords who are starting out and may have those high, first-year fees – this can make a crucial difference.
The only caveat to note here is that these losses can only be attributed to property. In other words, if you are involved in several different businesses, you can’t mix and match the losses so to speak.
Something that a lot of landlords don’t realise when it comes to claiming expenses is that mileage counts. Sure, many may have seen a lot of expenses slowly evaporate over the years, but one that remains is the fact that you can claim mileage every time you visit one of your properties. Considering the fact that some landlords will be doing this multiple times per year, it’s an expense which can make a difference.
How much of a difference, you might ask? Well, HMRC guidelines state that you can claim 45p per mile