Proof of income for tax return

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Jenster
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Proof of income for tax return

Post by Jenster »

Not sure if this is the right place to put this but I was wondering what people do about proof of income for their tax return?

Obviously you have bills, invoices and receipts to document your expenses, but is something similar required for rental income? For a lot of my bookings all I have is a bank transfer on my bank statement and all the other records of date and amounts of payments are in whichever booking system the booking came from (OD, ABB, TA and freetobook). I do have a spreadsheet to bring them all together, but this is only a record after all and not proof of rental income.

I haven't looked at the others, but in OD this info does not appear to be easily downloadable, and there is no invoice as such for each payment. The only way I can see to do it is by taking a screenshot of the payments summary page. Just wondering how everyone else does it?

Thanks
Jenny
zebedee
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Post by zebedee »

Spreadsheet.
Everything then goes to accountant.
newtimber
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Post by newtimber »

You also have to remember in which tax year the letting took place. This may be different from the tax year in which TA etc actually hand over the money they have taken on your behalf - or you may have received money in advance of the actual stay.
Jenster
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Post by Jenster »

zebedee wrote:Spreadsheet.
Everything then goes to accountant.
Thanks for the replies. So you don't need anything else such as copies of payment requests or receipts for payments received, just the spreadsheet?
zebedee
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Post by zebedee »

I do have that information, and keep it for the required number of years.
My accountant has never asked to see it.

We have a dedicated bank account though, and he gets the bank statements so it's easy for him to cross reference.

He also gets every receipt which is sorted into months and then loaded onto spreadsheets as well, with regard to expenses.
Jenster
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Post by Jenster »

newtimber wrote:You also have to remember in which tax year the letting took place. This may be different from the tax year in which TA etc actually hand over the money they have taken on your behalf - or you may have received money in advance of the actual stay.
I was wondering if I could use cash basis? I know the notes with the form say you can't but I found this in the property income manual, all of which apply to me:

We are, therefore, prepared to accept the use of a ‘cash basis’ (profits based on the cash paid and received in the year) provided all the following conditions are met:

the case is small; by ‘small’ we mean where, for any year, the total gross receipts of a rental business (before allowable expenses are deducted) don’t exceed £15,000, and
the ‘cash basis’ is used consistently, and
the result is reasonable overall and does not differ substantially from the strict ‘earnings basis’.
Janev1000
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Post by Janev1000 »

I keep my own manual records, aside from the listing sites, and colour code the tax years and submit my own returns.

I have always submitted my returns (3 so far) and have used the cash basis and have not realised that there is a limit of £15,0000 for property income :shock: as I have obviously missed this in the property notes, despite being meticulous about everything else, including integral features, etc! I did use an accountant for advice for the first year, but again, no mention of the cash basis. My accounting is very simple and I have no mortgage on the property. However, I've not been picked up on this and had referred to the government's guidelines on cash basis, which makes no mention of property income being exempt:

https://www.gov.uk/simpler-income-tax-cash-basis/print

Also, it appears that the rules are changing for 2017-18 and property can be included? - so I am loathe to change anything at this point, unless requested to do so. I have had approx 70% occupancy for all 3 returns and I can't see that there would be much difference with the income reported?
Bunny
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Post by Bunny »

I've always used 'cash basis' for my holiday let accounts. I too, was not aware of any limit on income.
Janev1000
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Post by Janev1000 »

Well apart from the £15k limit, the following two apply for me:

the ‘cash basis’ is used consistently, and
the result is reasonable overall and does not differ substantially from the strict ‘earnings basis’.
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Nemo
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Post by Nemo »

Jenster wrote:We are, therefore, prepared to accept the use of a ‘cash basis’ (profits based on the cash paid and received in the year) provided all the following conditions are met:
the case is small; by ‘small’ we mean where, for any year, the total gross receipts of a rental business (before allowable expenses are deducted) don’t exceed £15,000, and
the ‘cash basis’ is used consistently, and
the result is reasonable overall and does not differ substantially from the strict ‘earnings basis’.
I'm guessing that's something that hasn't been updated. This is from gov.uk now.
2. Who can use cash basis

You can use cash basis if you:

run a small self-employed business, eg sole trader or partnership
have a turnover of £150,000 or less a year
Bunny
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Post by Bunny »

Nemo wrote:
Jenster wrote:We are, therefore, prepared to accept the use of a ‘cash basis’ (profits based on the cash paid and received in the year) provided all the following conditions are met:
the case is small; by ‘small’ we mean where, for any year, the total gross receipts of a rental business (before allowable expenses are deducted) don’t exceed £15,000, and
the ‘cash basis’ is used consistently, and
the result is reasonable overall and does not differ substantially from the strict ‘earnings basis’.
I'm guessing that's something that hasn't been updated. This is from gov.uk now.
2. Who can use cash basis

You can use cash basis if you:

run a small self-employed business, eg sole trader or partnership
have a turnover of £150,000 or less a year
Thank you for the update; that's very reassuring that I wasn't over the limit after all.
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