Tax relief on service charges and ground rent - pro rata?

[OxDoc]

Hello, I recently started letting out a flat that I had previously been living in. I paid the service charge and ground rent before the property was let out. Am I supposed to claim these as tax-deductible expenses for the period the flat has been let out on a pro rata basis (e.g. 50% if the flat was let for half of the tax year), or is it payments that were made during the letting term that are claimed? I can't find this confirmed anywhere.

[Richlist]

Well, for a start, claiming expenses is voluntary, you aren't 'supposed' to claim, it's entirely up to you. Landlords would normally offset the cost of service charges & ground rents on their Self Assessment Form for the period the property was let & any void periods between tenancies.

So, from the day you start letting the property to the end of that tax year you would claim the expenses on a pro rata basis. You would then continue to claim expenses for the whole of the time the property was let or was available to let.

[OxDoc]

Thanks. OK, yes I meant "supposed to" more as in understanding what's the limit of what a landlord can claim.

[Richlist]

Presumably you are doing this yourself ? Are you aware of all the other revenue & capital expenses you can claim ?

[OxDoc]

13 hours ago, Richlist said:

Presumably you are doing this yourself ? Are you aware of all the other revenue & capital expenses you can claim ?

Yes, myself. I am letting out just one flat, so thought it shouldn't be too complicated to work out the tax! I'm not sure how I'd tell if I were not aware of all the other claimable expenses... I was planning to put down basically letting agents fees, maintenance costs, insurance and safety check costs, as well as the service charge and ground rent. If I'm missing anything major, it would be good to know.

[Richlist]

Theres 

* Utility costs during voids, car mileage or capital allowances, telephone, ISP, printer cartridges, cleaning materials if you do it between tenancies, stationery, use of home as an office, costs of any permission to let if permission is required by your lease.

We have claimed some years for postage, books & publications, bank charges, rent guarantee insurance, photocopying, advertising, consumables, computer software and capital allowances for equipment and even dry cleaning bills in an emergency.

It depends on you circumstances as to what is appropriate. I've always viewed tax returns as a means of maximising my income ie the more I can claim for legitimately the less tax I pay.

[OxDoc]

Ah, there's a few I hadn't thought of. Utility costs and travel are ones to bear in mind. I can't see myself actually incurring any office costs from letting the flat, so I don't see myself claiming those - I also don't imagine it would be that great a payment compared to the work of keeping records of it all!

[Richlist]

With one property to let it's probably easiest to just claim the HMRC approved travel/mileage costs of 45p/mile.....I keep a small notebook to log the date, destination & mileage. At the end of the tax year, total the mileage covered X 45p

Most of the other items require very little work/record keeping other than obtaining a receipt for the expense.

If you have a Lettings Agent you are going to be limited to what you can claim for as it's expected that your Agent will deal with stuff for you.

With an Agent you probably can't claim the use of your home (fixed at a few hundred pounds a year & requiring absolutely no work of any kind).

Good luck.