A Landlord’s Guide To Completing And Filing A Tax Return

If you’ve recently started to rent out a property, you may be wondering about your tax responsibilities. We know that taxes can be a bit of a tricky subject, especially for new landlords submitting a tax return. And that’s where this comprehensive guide comes into play.

The GoSimpleTax team is here to help you stay on the right side of the taxman. In this guide, we cover how to complete and file a Self Assessment tax return – from registering to keeping hold of your records afterwards.

So, without further ado…

REGISTER FOR SELF ASSESSMENT

As long as you make more than £1,000 in rental income, you must complete a Self Assessment tax return. This uses information on your income and expenses (more on that later) to tell HMRC how much to tax you.

If you’ve not sent a tax return before, you’ll need to register for Self Assessment by the 5th October in your second tax year of being a landlord. To do this, you will first need to create an online account or sign in using Government Gateway. Once you’re up and running, you can register for Self Assessment either online or by filling out, printing and posting the SA1 form.

Now that you’ve registered, you’ll receive a letter within 10 working days that contains your Unique Taxpayer Reference (UTR) number. If you happen to work abroad, expect to wait up to 21 working days. You’ll need this number to send a tax return, so make sure to keep it at hand for this next bit.

COMPLETE AND SUBMIT YOUR SELF ASSESSMENT TAX RETURN

The good thing about the Self Assessment is that you only have to complete the sections appropriate to you. With that being said, it’s imperative that you don’t make any mistakes on the forms.

If you’re unsure about what sections are relevant to you, GoSimpleTax’s handy software simplifies the tax return process. Our software automatically populates the appropriate sections on the tax form, allowing you to save yourself hours of time that you could be spending on your rental business.

The supplementary page you need to use to record UK property income is the SA105. This must be completed and filed alongside your SA100 (main Self Assessment tax return) before the deadlines we outline in the next section. HMRC’s ‘How to fill in your tax return’ guidance notes can help you understand what information goes where.

You may also need to fill in some supplementary forms, depending on any other forms of income you receive – like employment (SA102), foreign income (SA106) and capital gains income (SA108). If you live outside the UK, you will also need to complete the residency (SA109) page.

Our software can also be used to submit your Self Assessment tax return too. Alternatively, you can use HMRC’s online services or download and fill in the SA100 tax return form, print it out and post it to HMRC.

DEADLINES AND PENALTIES FOR LATE SUBMISSIONS

When it comes to submitting your Self Assessment tax return, there are several deadlines to keep in mind.

You’ll have until midnight on the 31st October to submit the paper tax return to HMRC. If you prefer to do everything online, you’ll have until midnight on the 31st January the following calendar year to submit your online tax return. This is also the deadline for paying any tax you owe and your first payment on account (advance payment towards your bill for the next tax year).

There’s typically a second payment on account deadline on the 31st July too. You can find out more about this here.

Failure to send your Self Assessment tax return or pay your tax bill on time will usually result in a penalty. You can find out more about penalties here.

CLAIM YOUR ALLOWABLE EXPENSES AS A LANDLORD

As with every other self-employed individual, there’s a list of business expenses you can claim as a landlord to reduce your tax bill. They include:

• Property repair and general maintenance costs
• Running costs, including council tax, water rates and electricity bills
• Accounting and management fees
• Costs of services
• Insurance
• Replacement of domestic items
• Mortgage interest and other finance charges

Once you work out your taxable rental profit, you may be able to deduct these expenses (as long as they were incurred solely for the property) from your rental income to lower your tax liability.

RECORD-KEEPING

In order to work out the profit that you’ll pay tax on, you’ll have to use all records of your expenses and rent received from tenants. While you don’t need to submit the records themselves as part of your tax return, HMRC can request to see them should they launch an investigation.

The records that you should keep at all times include:

• Receipts
• Invoices
• Bank statements
• Rent books
• Mileage logs

You must keep these records for at least five years following the 31st January of the tax year in which you’ve used them to file your Self Assessment tax return. If your records aren’t accurate, HMRC can charge a penalty.

If this is your first time filing taxes or you simply want to make things simpler for yourself, turn to GoSimpleTax. We can help you complete the Self Assessment tax return form by storing your income and expenditure information throughout the tax year before adding this to the tax return itself.

The best part about our service? We offer a freemium version to use until you want to submit your tax return to HMRC or add more than five entries per calendar month. Learn more about our software here.

Watch how to file your self assessment tax return as a landlord

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.