Purchase and rental tax gaps: how landlords can keep more of their income

Landlords will still face lost rental income. Real estate investors are facing nearly £ 400 million in rental debt after the pandemic.

Coronavirus and successive closures have affected tenants and severely affected rental landlords, resulting in a £ 360 million payment arrears, according to the charity StepChange. The new government cash, which will be available through local councils to support low-income tenants, will fill only part of the gap.

Many landlords also miss valuable tax breaks that could prevent a large portion of their income from ending up in the hands of HM Revenue & Cars.

Landlords ’income relief, such as the ability to cover their mortgage costs with their own tax invoice, they have gradually invaded back – and owners who buy for rent are now wondering if the numbers are still adding up.

But there are still a number of often underused benefits available that are now more important than ever.

Take advantage of little-known costs

Many landlords are unaware that they may claim reimbursement of expenses, such as travel expenses during the rental of the property and telephone calls or messages sent in connection with the property. Those who have a monthly contract can only spend part of the time they spend on business purposes.

It is also possible to claim reimbursement of magazine subscription costs for real estate investments, services and money spent on real estate advertising, as well as legal and accounting costs related to the rental purchase. As you can see using the calculator below, deducting this type of expense from your income can make a big difference.

Zena Hanks of accounting firm Saffery Champness said: “Monitoring these small costs may seem difficult, but it will make them much more likely to be accepted by HMRC. It is important to remember that there must be expenditure in full and exclusively for business purposes. “