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• # 114279
• Tue 06 Dec 2016 10:53 PM

Hi everyone,

I'm trying to get my head around self assesment tax. What happens if someone is PAYE as well as having income from somewhere else? It was actually a friend of mine that asked me about this.

They both work and PAYE but they rent out a flat to suppliment their income. In these kinds of cases do you just fill out a self assesment for the extra income minus it's allowable expenses? There's nothing in any books i've read about these kinds of things.

Thanks in advance,

L

• Chester258

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• # 114280
• Wed 07 Dec 2016 08:43 AM

Hello L

You will need to complete a self assessment form for both your friends if it is in joint ownership to show the income received and expenses incurred. Any other income they receive will also need to be shown on the tax returns.

Hope that helps

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• # 114281
• Wed 07 Dec 2016 08:51 AM

Hello Drew,

Thanks for this! I was under the impression that any income through PAYE would already have been taxed so therefore shouldn't appear on the self assessment?

If it was on the self-assessment would it not then be taxed again? or would HMRC know how much they have been taxed on and just tax the remained?

Working with tax seems a little bit of a minefield. 

Thanks,

Liam

• Chester258

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• # 114282
• Wed 07 Dec 2016 09:09 AM

Hi Liam,

The first thing that your friends would need to do is register with the HMRC and request a unique tax reference (UTR). Once they have this then they can fill in the self-assessment form on-line.

I would presume that they are going to split the rent 50/50? In which case they will only put half of the rent down on each individual form. The form itself is quite lengthy, covering every conceivable source of income. There is a box where they will declare how much money they have earned through the PAYE system plus how much tax they paid so this will be accounted for in the HMRC computations. I believe that they might be able to claim for maintenance costs towards the flat as well as insurance etc but I would double check allowances on the HMRC site first or there maybe an expert on here willing to share?

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  Janet D

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• # 114283
• Wed 07 Dec 2016 09:23 AM

Hello Janet,

Thanks for this, that's excellent advice! They only started receiving income after April this year so they are going to need to wait until after April 2017 anyway. Once they recieve their p60 then I guess it's just a case of plugging the numbers in from this as well as their taxable income from the rental?

I have had a quick look at the allowances and there is a fair amount that can be claimed. Maintainence and repairs but not furnishings etc I beleive. 

As I understand it they will need to split it 50/50 processing a return each.

Thanks again,

Liam

• Chester258

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