Landlord gaps: how can investors who buy for rent reduce their income tax in 2022

Threatening tax the change threatens to reduce the profit from the lease purchase at a time when many landlords are still struggling with lost rental income after a pandemic.

sector barely avoided another increase in the stamp duty in 2021, when the Chancellor pulled a last-minute increase in the investor surcharge to four percentage points from the last budget.

It comes after a pandemic and successive prisons hit tenants and severely affected the landlord’s rental incomewhich, according to the debt charity, created a payment arrears of £ 360 million StepChange.

a lot landlords they also missed valuable tax breaks that could have prevented a large portion of their income from ending up in the hands of HM Revenue & Cars.

Landlords’ income relieffor example, that they can offset their mortgage costs with theirs tax invoice are gradually withdrawn – and purchase owners for delivery now they are wondering if the numbers are still adding up.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 the cost of subscriptions to real estate investment magazines, services and money spent on real estate advertising, as well as legal and accounting costs associated with renting. 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 offsetting of expenditure wholly and exclusively for business purposes. “