UKH

If a person was to rent their flat out for £500 pcm, and the property agency charged them £50 pcm for maintenance, Would you declare an income of 500x12 for the year, or would you subtract the agency cost and declare 450x12?

Any help would be greatly received. 

Cheers. 

Subtract agency fees, see https://www.gov.uk/renting-out-a-property/paying-tax

Thanks very much Brass Nipples, did I understand also from the link that you sent that the first £1000 of rental income is tax free? So in the above example 500pcmx12 months, a person would declare an income of £5000?

Thanks again for any help,  and I appreciate that you're not a financial adviser etc!

Yes, if the personal allowance is actually applicable, and No in the example given.

Sorry, don’t have time meantime; if no one else responds, I’ll try and amplify later.

In your self-assessment it'll calculate it for you.  Enter £6000 rental income and in the management fees area enter £600.  HMRC are expecting to see this broken out, along with other maintenance, so probably entering £5400 and £0 for management could be a flag raiser. 

Yes, this is what you do. Report the 'gross' income - in your case £6000 in the income box of the property pages of your tax return.

Then complete the boxes for expenses.

OR use the £1000 property allowance, so net taxable income is £5k.

You can't do both. As in your can't claim the agency charge AND the property allowance.

So add up agency fee plus any other costs e.g. annual gas certificate, buildings insurance, repairs you made to the property, mileage at 45p per mile if you needed to drive to the property to inspect it, etc.

If that is more than £1k then claim those expenses for a lower taxable profit.

I'm a qualified accountant and run my own Accountancy firm

Exactly you declare all the rental income then decide to itemise costs, or take the £1k allowance, not both. The hmrc software then calculates what is taxable income, not the person filling in the return.

Thank you everyone who took the time to reply...it is greatly appreciated! 

😊