Have you underclaimed your expenses?
In 2022/23, HMRC sent a nudge letter to taxpayers that included a statement saying that upgrading a boiler wouldn’t be a deductible expense for tax purposes, i.e. as a deduction from rental income. It is now writing to individuals admitting that this was wrong. What action do you need to take?
The initial letter was a prompt to check property letting expenses that had been claimed on the 2021/22 tax return. It contained the statement that “upgrading a central heating boiler from an older, less efficient model’ is an example of an expense you can’t claim tax relief for”. Essentially, the implication is that an improvement is not a repair, and so is a capital expense. HMRC has now owned up to the mistake, and has confirmed that such an expense would generally be accepted as a repair.
If you haven’t claimed for the cost of a replacement boiler, you could be owed a tax refund. Check your returns and if you have underclaimed your expenses, take action accordingly. If it is for 2022/23, you can simply amend the return. However, if it’s your 2021/22 return that is affected, you should contact the specialist team by email at responseteam5@hmrc.gov.uk.
Related Topics
-
ATED filing deadline approaching for 2026/27
Companies holding high-value UK residential property need to ensure their annual tax on enveloped dwellings (ATED) returns are filed by the end of April. With the deadline approaching, what do you need to do?
-
HMRC to contact representatives over NI refunds for deceased taxpayers
HMRC has updated its guidance to confirm that it will write to representatives of deceased individuals where it believes too much NI has been paid. What should you expect if you receive such a letter?
-
Free childcare for company owners?
You’re an owner manager and your daughter is due to start nursery. You understand that working parents can get free childcare but a friend said this isn’t available if you only pay yourself dividends. Is this true and what can you do to qualify?