Most landlords will be aware that any profit made from letting a property is subject to UK income tax, whether the landlord lives in the UK or not, and must be reported in a self assessment return.

The deadline for registering for self assessment was Sunday, October 5, 2014, paper tax returns are due on October 31, 2014, and online returns must be in by January 31, 2015.

HM Revenue and Customs (HMRC) is currently targeting residential landlords, via its Let Property Campaign, in an attempt to recover the £500 million it believes is being underpaid each year in the sector.

It has been writing to letting agents demanding details of rents collected on behalf of landlords for the tax year that ended on April 5, 2013.

So if your tax affairs are not up to date and you owe tax on your letting income, you now have the opportunity to make a voluntary disclosure via HMRC’s Let Property Campaign helpline on 03000 514 479.

Landlords who do so will have three months to calculate and pay what they owe and will receive the best possible terms. If they do not take up this opportunity they could face hefty fines, or even criminal prosecution.

To avoid paying too much tax, landlords need to be aware that certain deductions are allowed when their property is being let or is available for letting.

You should consult a qualified accountant or HMRC for specific advice regarding this. However, as a general guideline landlords are permitted to make certain deductions from their rental income before calculating profit.

Allowable deductions include, but are not limited to, the following expenses...

The cost of mortgage interest on loans used to purchase the rented property or to fund improvements The fees charged by an agent to let and manage your property Accountant fees Ground rent and maintenance charges on leasehold property Water and sewerage rates, unless charged to tenants Building and contents insurance and any insurance claim fees We would advise landlords to keep a record of the expenditure relating to the rental of their property so that their tax return is easier to complete and they don’t end up paying more tax than necessary.

For impartial, expert advice on all aspects of renting, letting, buying or selling residential property, please contact Jordan’s in Warrington on 01925 474747 or email