Property investors can put their foot down on the landlord money saving accelerator by making sure they don’t put the brake on claiming travel expenses.
Travel expense claims are tricky for landlords and are often a source of unwanted attention from the tax man.
The rules are quite simple.
Landlords can claim travel expenses for any trips they take for their property business.
That includes going to the bank, the DIY for bits and pieces and to rented properties to show round tenants, inspect homes and carry out repairs.
But, and this landlord money saving tip comes with a warning.
Do not claim travel expenses if your rental properties are managed by a letting agent. HM Revenue and Customs will argue that your trips are unnecessary and that as your agent manages them, no claims are due.
Many landlords try to claim for trips to overseas properties. If they do, they should expect a tough time with the tax man who will want to know why a trip to Spain or Florida involved a two week break.
The argument will be the trip was really a holiday and the travel was incidental, so no claim is allowed.
Claims for viewing potential properties to add to a portfolio are out as well – whether they are in the UK or overseas.
Any expense claim relating to buying buy to lets are disallowed – but if the property is for speculative development, then different tax rules apply.
If landlords decide to claim travel expenses, how much can they claim?
Claims can be made two ways –
Keeping a property business mileage log and apportioning the running costs of the car. This means keeping a tally of fuel, insurance, repairs and excise licence costs and dividing them between business and private use.
So, if a car costs £5,000 to run for the year and the landlord drives 10,000 miles split 70% for private use and 30% for business, the claim is £1,500 (30% of £5,000)
The easy way to claim mileage is still to keep a log for property business trips, but to claim 45p a mile for the first 10,000 business miles and 25p for any further travel.
The landlord driving 10,000 miles would pick up £1,350.
How to claim travel costs is down to the landlord, as long as the formula is applied consistently and fairly.