I’ve been trying to find a definitive answer with limited success on this - my tenants will be paying 12 months rent up front.
However as the rental period falls between the end of the current fiscal year and the start of the next (April) can I apportion the rental revenue across both years for tax purposes?
Or do I declare the income this year, pay the full tax this year and next year pay less as revenue would be less?
I think it’s the latter but would appreciate some insights on this. I’m declaring on a cash accounting basis.
As you are using cash basis you’d pay tax on full amount this year and then not include in next years calculation. You can only split if using accruals basis.
always when you recieve the money do it fall in that tax year. Likewise if a rent payment is late it may fall in another tax year. Only record when you get it
If your tax for the next year will be less as a result, you can reduce your payments on account to half of what you think you will owe. If you reduce them too much though, HMRC will charge interest.