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Ward Williams Chartered Accountants
26/02/2024
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HMRC targets buy to let landlords claiming higher levels of repair and maintenance expenditure
Landlords across the UK have started to receive letters from HMRC as part of their ‘One-to-Many’ campaign. This letter focuses on the repair and maintenance costs claimed within the taxpayers 2021/22 tax return.
Since December 2023, HMRC has been reaching out to landlords who completed the property income pages of their 2021/22 tax return and claimed repair and maintenance costs. HMRC’s concern arises from the possibility that some taxpayers may have inadvertently included capital costs within these figures.
The One-to-Many letters include examples differentiating between revenue and capital costs. Please note that this is not an exhaustive list that HMRC have included and careful consideration is required when differentiating between revenue and capital expenditure.
Landlords receiving these letters are urged to thoroughly review their 2021/22 tax returns and make any amendments necessary to exclude capital costs. HMRC’s letter states that the amended tax return is required to be filed by 31 January 2024. This is correct for an online amendment, however, tax returns can be amended for a period of up to 4 years after the end of the tax year in question. Taxpayers will be required to write to HMRC in cases where they have missed the 31 January 2024 deadline.
The letters also prompt landlords to verify that they haven't claimed excessive tax relief for property finance costs.
For further information on the above or advice on Ward Williams services, please do not hesitate to contact Tom Kirk on 01895 236 335 or Tom.Kirk@wardwilliams.co.uk
