What tax year for rental income

[royboy1]

Hi
I’m getting a bit confused over tax years for rental payments.
Sorry if this is an obvious thing, but I just don’t want to make to many mistakes.

In 2016 I took over an existing tenant in a flat, I bought in august 2016.
Come March 2017, time for tenancy renewal, I was paid rental income twice in that month
for March and April, money was paid into my bank on 30 of March.
Does that double payment go on 2016-2017 tax year or one payment go on to the next tax year
2017-2018 ?

Also a second property I have, was rented out on the 5 August 2017 for the first time.
Come the 5 April 2018, what tax year would that payment for April go on, I won’t get the money until say around the 10 of April. ?
Should I just count it as payments April through March 2017-2018 regardless of what, and when payment went into my bank account. ?

I’m also a non resident landlord outside the uk, and this is my only income, I’m not a LTD company
also these are non commercial lettings.

Thank for any help
Royboy1.

[SteLacca]

Rental income is taxable when you become entitled to it, regardless of when it's paid.

However, FA2017 included an abandoned clause which would permit (and I believe default to) rental to be taxed on the receipts basis with effect from 6 April 2017. There's a good chance that this will come back in the Budget on Wednesday.

[maths]

In practice the cash basis is allowed by HMRC if gross rental income does not exceed £15,000.

[bd6759]

Rental income is taxable when you become entitled to it

No. Rental income is taxable in the tax year in which it arises, regardless of entitlement.

[royboy1]

Hi
Thank you all for your replies.
Still not 100% sure but think the way to go is 12 rental payments April- March year to year.
Deduct all expenses in the period 6 April- 5 April and stick with that, unless something changes
With the way revenue is counted.

I’m only generating 17000 per year, deductions around 4,000 , plus repairs, ? 11,500
Personal allowance, so only paying tax on around 1,500. at 20%. Reckon I want pay tax in the end , but just wanted to get it right from the start with the tax office.
Thanks
Royboy1

[bd6759]

Still not 100% sure but think the way to go is 12 rental payments April- March year to year.
Deduct all expenses in the period 6 April- 5 April and stick with that, unless something changes
With the way revenue is counted.

Correct.

Arising as opposed to entitled, means this:
Say you rented your property on 6 October 2016. The rent was £1000 per month, payable yearly in advance. On 6 October you would be entitled to £12,000, but you wouldn't pay tax on this amount in 2016-17. £6,000 arises in 2016-17 and £6,000 arises in 2017-18, and those amounts would be taxed in those years.
Similarly if you paid the cost of annual insurance of £1200 on 6 October, £600 would be an expense in 2016-17 and £600 in 2017-18.

[SteLacca]

Rental income is taxable when you become entitled to it

No. Rental income is taxable in the tax year in which it arises, regardless of entitlement.

Agreed. I was trying plain English for the more common scenario of rent becoming payable at the time that it arises.

[royboy1]

Still not 100% sure but think the way to go is 12 rental payments April- March year to year.
Deduct all expenses in the period 6 April- 5 April and stick with that, unless something changes
With the way revenue is counted.

Correct.

Arising as opposed to entitled, means this:
Say you rented your property on 6 October 2016. The rent was £1000 per month, payable yearly in advance. On 6 October you would be entitled to £12,000, but you wouldn't pay tax on this amount in 2016-17. £6,000 arises in 2016-17 and £6,000 arises in 2017-18, and those amounts would be taxed in those years.
Similarly if you paid the cost of annual insurance of £1200 on 6 October, £600 would be an expense in 2016-17 and £600 in 2017-18.

Hi, Thank you all for your replies.
Wow, I did not know you needed to portion out the insurance cover over 12 months and split it in to the correct tax years. Thank you for pointing this out
Now do I need to do the same with all yearly charges? like Ground rent, Gas test, Fire alarm test,
Electrical pat test ? or is it just insurance ?
Thank you for your help
Royboy1