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Old 05.04.2007, 09:34
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Re: Can anyone help with a UK tax question?

Sadly the inland revenue (or whatever it is called now) don't accept being stupid as a valid reason. I used to work in an accountancy firm in London with its own tax department, so the stories I used to hear..

I knew of someone in the same situation as you, who rented his flat out to a friend while he went travelling for 2 years. He never paid tax or let the inland revenue know, and when he came back he received letters from them claiming the tax back (believe it or not, they can find out, and you would not think something so small as a few hundred quid missed tax would get them in such a sizzle, but it does). He had to use an accountant to help him out, which obviously increased the costs for him.
Also, I remember when I lived in London, the owner of the house I used to live in, lived in the States, and we received a letter from the inland revenue asking us how much rent we paid, but never filled it in. So they are obviously interested in the missed rent tax.

Anyway, in your case I would definitely fill it in, since you won't have to pay any tax on it (you may have to fill in a yearly tax return or they might waive that requirement if they can establish you don't have any other earnings - but don't forget interest income if in a UK bank account).
I think a quick calcuation is as follows (but double check, I have not done a tax return for a few years)
rent - 4,800 (from 1 April)
M&R - less 480 (10% if you have left furniture in your place, even if it is just a table)
less any other expenditure you can think of - mortgage interest, any bills you pay on his behalf, any insurance costs etc etc, don't be shy!
This will be your net rent. I may be wrong, but I don't think you can claim any tax back if the net rent is negative, i.e. you can't set it off against your interest income for example.
Anyway, hope this helps!!
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