Landlord’s Energy Saving Allowance

You can reduce your tax bill by up to £1,500 a year with the Landlord’s Energy Saving Allowance.

What you can claim
You can claim Landlord’s Energy Saving Allowance for the costs of buying and installing the following energy-saving products for properties you rent out:

  • cavity wall and loft insulation
  • solid wall insulation
  • draught-proofing
  • hot water system insulation
  • floor insulation

Owning property abroad
You can claim Landlord’s Energy Saving Allowance for properties you rent out abroad, as long as you pay UK tax on profits from those properties.

Owning more than one property
You can claim a maximum allowance of £1,500 for each house, flat or bedsit you rent out. For example, if you rent out a building that contains 4 flats, you can claim up to £1,500 for each flat.

Owning a property with others
If you own the property with others, you can claim a share of the allowance in one of 2 ways:

  • based on the amount of the property you own (eg if you own half of the property you can claim up to £750)
  • based on the amount of money you spent on the improvements (eg if you covered half of the costs, you can claim up to £750)

Owners can claim a maximum £1,500 in total for each property owned.

Installing energy-saving items yourself
If you install the energy-saving items yourself, you can claim Landlord’s Energy Saving Allowance for the costs of buying them, but not for installing them.

What you can’t claim
You can’t claim Landlord’s Energy Saving Allowance on a property if:

  • you’re claiming an allowance under the ‘Rent a Room’ scheme
  • you’re renting out the property as furnished holiday accommodation

How to apply
You claim the allowance when filling in your tax return:

  • when you fill in your Self Assessment tax return – if you rent out your property as an individual
  • under ‘allowable business expenses’ on your Company Tax Return form – if you rent out your property as a business

New RTI Rules For Smaller Businesses In March

HM Revenue & Customs (HMRC) has been phasing in the Real Time Information (RTI) system since April 2013, and it is now entering the next phase. Employers with fewer than 50 employees will now be required to use RTI for each member of staff on payroll.

Small businesses (those with fewer than 50 employees) and micro businesses (nine or fewer employees) will be required to submit their payroll information to HMRC in ‘real time’ from 6 March.
Until this date, small businesses who had difficulty reporting weekly staff payments, or payments occurring more regularly, were allowed to send their information by the end of the tax month.

Preparing for RTI has been the responsibility of each business, with all now expected to have sufficient infrastructure in place to enable submission.
Micro businesses who submit their information late may be liable to a £100 monthly penalty, while small businesses may be liable for £200.

Penalty notices will be sent quarterly, with interest charged if you fail to pay within 30 days, therefore HMRC has advised businesses to make preparations for RTI.

The main document businesses are required to submit is the Full Payment Submission (FPS), which contains details of all the payments and deductions that have been made to each employee – including income tax, national insurance contributions (NICs) and student loans.

This must also include accurate details of new employees and any who have left the business since the last submission.

Every time an employer makes a payment to an employee they will need to submit an FPS. This can be done either at or before the time of payment, which could be weekly or monthly, and must also include payments that are below the lower earnings limit for NICs.

Year End Tax Planning
We have set down some key planning points that you may wish to consider

Marginal Tax Rates
We know that the basic rate of tax increases to the higher rate of tax for taxable income above £31,865 and to 45% when taxable income exceeds £150,000. A higher marginal tax rate may be payable
between £100,000 and £120,000 when the personal allowance is gradually withdrawn giving an effective marginal rate of 60% in this band for non-savings and savings income.
It may be worthwhile to consider contributions to a pension scheme, making charitable donations or investing in SEIS or EIS companies to take your taxable income to below £100,000 to avoid the 60% marginal rate of tax.

Inheritance Tax
You have worked hard to create your wealth – now make sure you do all you can to minimise any payments that may be due for inheritance tax. There are many opportunities to plan and the key is to plan thoroughly and in good time. Estate planning should start early in life but it is never too late to start.
Do you have an up-todate Will? – one that reflects your wishes? Are you taking advantage of the available exemptions such as the annual £3,000 exemption, gifts out of income, and gifts on
marriage or civil partnership?

If you don’t already have an ISA, should you start one this tax year? A further
advantage is that ISAs are normally readily accessible (subject to scheme rules).