When filing your tax return as a self-employed landlord, there are a couple of different ways you can do it – either by paper or electronically. HM Revenue and Customs (HMRC) are keen to have most returns filed online - although the system can take a bit of time to get used to. There is an IT helpline available, which can guide you through the process.
Deadlines for filing
If you’re still opting to send in a paper return, then this must be sent to HMRC by the end of October. If it’s an online return, then the deadline is three months later at midnight on January 31. Failure to meet the deadlines results in an automatic £100 fine for every month the return is late.
Payment is usually made twice a year – in January and the other half in July. Interest is added for late payments (although it’s possible to appeal against penalties if you have a reasonable excuse).
Supplementary pages for landlords
There are supplementary pages that you will have to request and fill out (if you plan on completing a paper return). These are referred to as a UKP1 and UKP2. You’ll be asked to reveal how much rental you have received from your properties (or land) in the UK. Alternatively, it could be from renting a room in your home, or from holiday lettings.
Tips for filing your annual return
● It’s a good idea to keep an ongoing record of your expenses, so that you don’t have to sit up half the night before calculating a year’s worth. It doesn’t matter if you are using a notepad for the purpose of this task, or, more conveniently, using an accountancy app (where you can record expenses at that very moment, so you don’t forget later);
● If you’re the forgetful type, then you can sign up for email reminders to file – and when - from HMRC;
● If you choose to send in a paper return, then it’s always a good idea to use a recorded delivery or next day delivery service to ensure it arrives safely. They take longer to process, as they are checked by hand - and HMRC doesn’t take postal delays as an excuse for not receiving a return on time;
● You won’t be able to send your online return in if you fill something in wrong.
Although you currently have a choice of filling in a paper or an online return, HMRC did announce back in 2017 that they were changing to a system where all returns would be filed online. Those plans have currently been put on hold, but there is no doubt that at some point in the future you will have to fill in an electronic form. Therefore it may be worth getting used to it now – rather than getting used to paper filing, only to have to make the switch further down the line.
Speak to a specialist in investment properties.
Call 0333 123 1330