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Posted Thu, 28 Dec 2023 12:57:47 GMT by
Hi Filling in the self assessment form for rental income. There are a couple of items that I paid for on a date which falls after the end of the tax year but which were due during it. This is due to mistakes on behalf of the property management company (forgot to add VAT on maintenance) and the building management company (service charges which I was not billed for). If I settled these after the end of the tax year but they relate to the previous year that I am completing the form for, where do I include these?
Posted Thu, 04 Jan 2024 15:38:07 GMT by HMRC Admin 2

Firstly, it is crucial to determine if you are using either the cash basis or generally accepted accounting practice (GAAP) to decide in which tax year such expenses should be submitted.

In general terms, the cash basis method, property business receipts and expenses are accounted for when money is received or paid, not on the date the income is earned or expenses incurred. In this case, would be the following tax year.

However, if you use the GAAP method, you may claim such expenses in the year they were incurred, not received, or paid.

You can find further guidance here:

PIM1092 - Cash basis for landlords: overview
BIM31015 - Tax and accountancy: meaning of ‘generally accepted accounting practice’

In regard to where to include these costs, generally these would be accounted for in the property expenses section of the SA105 supplementary page, or box 44 if they include residential property finance costs.

Thank you.

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