Landlords: All you need to know about tax returns ahead of 31st October deadline

Wed 28 Sep 2016

It's that time of year when once again the tax return deadline looms for landlords.

If you file it by paper, the deadline is 31st October 2016 while online filing must be completed by 31st January 2017.

If you are a new landlord you must register in the self-assessment system by 5th October following the end of the tax year for which you need to send in a tax return. Penalties can be charged for late registration.

Carole Charge, technical and compliance director at Leaders says: “It is vital for landlords to keep their tax position up-to-date, HMRC takes this very seriously and there are penalties for late returns.

“Landlords should also be aware of all the tax allowances available to them to ensure that they don’t pay any more tax than is absolutely necessary. We have put together a summary of some of the key points all landlords should be aware of, but for advice relating to your specific circumstances you should speak to an accountant or specialist tax consultant.”

Deadlines

Register for Self-Assessment no later than 5th October 2016

Paper tax returns no later than 31st October 2016 Online tax returns no later than 31st January 2017Pay the tax you owe no later than 31st January 2017

Penalties

Penalties will be issued for filing a return late with a fixed penalty of £100 automatically raised if you miss the deadline. A daily £10 penalty can apply once you are 3 months late. The fine will increase if the return is more than 3 months late.

Tax allowances

There a number of expenses on which landlords could receive tax relief, including:

• Letting agents’ fees

• Accountants’ fees

• Buildings and contents insurance

• Interest on property loans – restrictions will be phased in from April 2017

• Maintenance and repairs to the property (but not improvements)

• Utility bills

• Rent, ground rent, service charges

• Council Tax

Exclusions

Not all landlords have to file a tax return. If your rental income (and other untaxed income) is less than £2,500 (net of expenses) you may not be required to register for self-assessment. You will still be required to disclose the income you have generated but a return will not need to be submitted.

Help with tax returns

To take the pain out of what can be a tedious process for many landlords, Leaders has launched a brand new service for its clients, as Carole explains: “We are now able to assist our landlords by providing a pre-completed form for any property that we manage in an identical format to HMRC’s own Self-Assessment return form.

“This report can then either be sent to you by email to help you complete your online return or be sent directly off to the HMRC if no other income or expenses need to be taken into consideration, saving you valuable time which could be put to better use!”

For more information please contact your local Leaders branch.