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
-
Why is HMRC checking PVA more often?
Your business imports goods and accounts for VAT by applying postponed VAT accounting (PVA) on its returns. HMRC is scrutinising returns and issuing large assessments in some cases. What can you do to reduce the risk of getting it wrong?
-
HMRC text or scam? Check before you act
HMRC is contacting some taxpayers by text this week about overdue Self Assessment liabilities and is also sending updates about VAT registration applications. At the same time, it has expanded its guidance on spotting fake HMRC messages on social media. How can you tell whether a message is genuine?
-
Electronic VAT return and payment due