Life can be busy when you're a landlord. Leaving aside managing your property and tenants, many landlords must also cope with the demands of a job or running a business. Then there's your own domestic and family responsibilities.
The last thing you need hanging over you is a tax return, but we're steadily approaching that time of year when the midnight 31 January online filing deadline for self assessment starts to loom in the distance.
Time to sort out your tax return
Few landlords look forward to doing their self assessment tax returns. It's not enjoyable, even if you do have a head for figures. Many people leave it until January, but that increases the risk of missing the deadline and having to pay a £100 fine.
About 600,000 people missed last year's self assessment online-filing deadline, but that was a huge improvement on the 2.3m who missed the 31 January 2022 deadline (caused largely by the impact of the pandemic).
You can file your self assessment tax return anytime after the tax year ends on 5 April. And rather than face the stress of battling the deadline in January, you could get it done now. There's no time like the present.
Assuming that you're an existing landlord who is already registered for self assessment, here are six tips that could help you to complete your self assessment tax return a bit quicker.
New tax year, new you!
You can file your Self Assessment for the tax year 2023/24 any time from 6 April 2024, don’t leave it until 31 January!
For self-employed individuals, sole traders, or those with non-PAYE income, GoSimpleTax provides direct Self Assessment filing with HMRC, offering helpful hints and savings tips throughout the process. Let GoSimpleTax handle all calculations.
1 Collect the self assessment information you need
If you spend time in advance gathering all the information you need to complete your self assessment tax return, you'll get the job done much quicker. As a landlord you'll need your ten-digit URT (Unique Taxpayer Reference), which enables HMRC to identify you. You will have included your UTR in previous tax returns. If you can't remember your UTR, you can find a lost UTR on the GOV.UK website or by checking any correspondence from HMRC.
You must also know how much gross rental income you've received during the tax year, and what property rental expenses you wish to claim as allowable expenses. You'll need your National Insurance number and summary details of any income you've received from self-employment and other taxable sources, such as share dividend payments, pension payments, capital gains, etc, as well as summaries of costs you wish to claim as tax expenses.
If you're employed, find your last P60, because it will show how much you've been paid and how much has been deducted in tax and National Insurance. If you've lost your P60, ask your employer for a replacement copy. If you've made contributions to charity or pensions that qualify for tax relief, have details of these to hand, too.
2 Check which supplementary pages you must complete
As well as the main self assessment tax return (the SA100 form), landlords must complete the SA105 supplementary pages, where you will detail your rental income and landlord-related tax expenses that you wish to claim. If you're also a sole trader, you'll need to also include the SA103 supplementary pages. Depending on your other taxable income sources, you may need to include other supplementary pages. Visit the GOV.UK website to view a full list of supplementary pages.
3 Pick the right time and place to complete your self assessment tax return
You'll complete your self assessment tax return much quicker if you do it at the right time in the right place, away from distractions and interruptions that will slow you down. If you can find a quiet place where you won't be interrupted, it can help you to concentrate on the job in hand. If you must do it at home and live with others, ask them not to disturb you so you can concentrate fully on completing your tax return. Switch off your phone and any other potential distractions.
4 Complete your tax return done in one session
If you complete your tax return in a series of shorter sessions, it will take you more time. You could find yourself putting it off and delaying it. Show more discipline. Remain determined to do it in one sitting (unless there really is no other option). If you've gathered all of the information you need, completing your tax return shouldn't take longer than three or four hours. Don't rush! Mistakes are much more likely. Be methodical. Build in enough time to check your tax return at the end.
5 Use self assessment tax return-filing software
You can complete and file your self assessment tax return online via GOV.UK. You'll need to sign in using your Government Gateway user ID and password. The big drawback is you're literally on your own. The only guidance available comes from notes HMRC publishes online, which may or may not help you.
Another popular option is to use commercial self assessment tax return-filing software, which can make things much easier and quicker. Basically, you specify the taxable income you need to report and the software guides you through relevant sections of the tax return, while ensuring that supplementary pages are completed. Automatic prompts reveal what information you need to enter and where, which makes mistakes less likely. Expect to pay about £60 or so for the year, which is significantly cheaper than an accountant, while still saving you lots of time and hassle.
6 Reach out for support
If you really hate the idea of doing your tax return, and you can afford it, a suitably experienced accountant will complete and file your Self Assessment tax return for you. This will save you time and hassle. If your return is simple enough, it should cost you as little as £150-£250. If your tax return is more complex, you'll pay more, depending on how much extra work is required.
Even if you do your own self assessment tax return, for a fee, an expert will look at your tax return and let you know if there are any mistakes. Such service providers will charge about £100-£200, but you might pay less tax as a result, so it can be a worthwhile investment.
In summary
We all want to complete things we don't like doing as quickly as possible. But you really shouldn't rush when it comes to your tax return, because even seemingly small mistakes can have big consequences. At very least, you may need to correct them later, which will only waste more of your time. More haste, less speed. In the worst cases, you could face financial penalties so make sure you get it right first time.
Copyright 2023. Sponsored post by Mike Parkes of GoSimpleTax - tax return software that can help you manage your self assessment.