UK Landlord Forum / Life

Hi All,

Since taking on our first rentable property in May of this year and becoming a landlord, I've been reading all of the sage advise on this website.... lurking in the background so to speak, just to increase my knowledge of the do's and don't..

And now, instead of lurking, I have a question of my own, that I can't seem to find an answer on....

recently we've had our first major problem, in that, the tenants came home to find a pretty bad leak in the en-suite, that had gone through the floorboards and through into the lounge, wrecking the ceiling, hence buildings insurance had to be claimed on...  which is currently underway with de-humidifiers and heaters to dry everything out (lath and plaster ceilings), before they can make good and redecorate..

So I know I can claim (against taxable income), for the repairs etc to fix the leak, and I also know I can claim my actual buildings insurance premium back, but can I also claim the excess payment?, I'm pretty sure I can, with regard to it being an expense incurred for the upkeep of the house, it's just that I can't find confirmation of that stated anywhere, and with my first tax return approaching, I don't want to get anything wrong and start annoying the tax man

Cheers for any answers you may give..

Mark

Why does something happening now affect your next tax return ?

You will probably get away with it, like any claim you need receipts, but if it were investigated by HMRC they might argue that this cost was not related to your expenses in letting your property. 

Quote from: Swagman on October 07, 2014, 08:51:35 AMSo I know I can claim (against taxable income), for the repairs etc to fix the leak, and I also know I can claim my actual buildings insurance premium back, but can I also claim the excess payment?,

I had a boiler breakdown in May... required a new boiler. I dutifully went and purchased one and had it installed within 5 days - cost £1,500. I swallowed that cost, but knew I could claim it as an allowable expense later... so it made it easier to swallow.

Later, I was reading through my Landlord's Insurance policy document and I thought it was worth getting in touch with my Broker to see if I could claim for it, retrospectively, and they [the Insurer] said "no". I read the document again and used some of the words in there to ask them to check again and my Broker got in touch with the Insurer and lo-and-behold they changed their mind and said "yes".

I was eventually fully reimbursed. My excess was £200. I will be counting the £200, now, as an allowable expense, as opposed to £1,500.

There is another way (taking my specifics as the example)... you can count the £1,500 as an allowable expense but then count the £1,300 received from the Insurer as income.

Just try to be consistent in your approach. HMRC aren't going to be that bothered about Landlords who make little mistakes like this - there is obviously an expense here and there is obviously good intention to pay tax that is due. They are much more interested in Landlords who are evading tax completely.

So - my answer is "yes"... the Insurance excess on a claim is an allowable expense for your next tax return. Just keep all documentation.

However, surely you cannot not claim for the repairs and the excess. Though I'm not sure this is what you are saying, so it's likely OK.

Quote from: Martha on October 07, 2014, 09:03:49 AMWhy does something happening now affect your next tax return ?

Because something happening now will be 'accounted' for in the 2014 - 2015 tax return.

Quote from: Hippogriff on October 07, 2014, 09:46:29 AM

Quote from: Martha on October 07, 2014, 09:03:49 AMWhy does something happening now affect your next tax return ?

Because something happening now will be 'accounted' for in the 2014 - 2015 tax return.

Yes, as I understand it, all expenses, costs and income from April 2014 - March 2015, will need to be accounted for in a tax return submitted after April 2015...

Quote from: Hippogriff on October 07, 2014, 09:46:29 AM
However, surely you cannot not claim for the repairs and the excess. Though I'm not sure this is what you are saying, so it's likely OK.

I've been told by the insurers (well the assessor anyway) that I can't claim for the actual fixing of the leak, (we obviously called out a plumber to turn off the water and assess the cause of the leak and fix it, as soon as it was spotted) all I can claim for is the repair for the resultant destruction it caused..  eg. drying out, plastering, repapering the ceiling, repainting etc.

So I was going to offset my maintenance / fix the leak cost against tax, and the other repair the destruction costs would be covered by the insurance, so no need to put on any tax return...  although to keep things consistent, I like the way you tally the total and then use the 'insurance pay out' to arrive at the cost I have incurred.  , but for that I'd need all the relevant costs and receipts that they will have.. and as this is the first time I have ever made an insurance claim, I'm not quite sure how their paperwork trails work..

Cheers for all the answers...

Quote from: Hippogriff on October 07, 2014, 09:46:29 AM

Quote from: Martha on October 07, 2014, 09:03:49 AMWhy does something happening now affect your next tax return ?

Because something happening now will be 'accounted' for in the 2014 - 2015 tax return.

Yes that is right.  But the "approaching" tax return window is for 2013 - 2014.
Swagman seems to be discussing things happening now, in relation to the 2013 - 2014 tax return which cannot be right . Have I misunderstood something ?

You are correct... he stated "my first tax return approaching"... my apologies. Things happening now will be for the next one. I possibly got mixed-up because I've already done my 2013 - 2014 one so, for me, it is in the past... well, apart from the payment part.

No problem. I am still finding my way.

Quote from: Hippogriff on October 07, 2014, 11:30:27 AM
You are correct... he stated "my first tax return approaching"... my apologies. Things happening now will be for the next one. I possibly got mixed-up because I've already done my 2013 - 2014 one so, for me, it is in the past... well, apart from the payment part.

Yeah this tax system and the submission dates are already confusing me..

but yes when I said my first tax return approaching, I will have from April 2015 - January 2016 to submit it....  as it will relate to a rentable property from April 2014

I realise that info from April 2013 is in the submission period now..

Sorry for the confusion