Rental Property Tax Return

Simon Misiewicz

Expat & Property Tax Specialist

4th March 2022

How much property tax will you pay as a UK landlord

Before we jump into the details about UK landlords and self-assessment tax returns, you may be interested in another article that we wrote. How much property tax does a landlord pay? Please go ahead and read that article later.

Understanding the basics of self assessment

As property accountants serving thousands of UK landlords that purchase buy to let properties, we know that it is challenging to understand the world of tax when submitting a tax return to HMRC.

Many people pay too much tax because they are not aware of the many tax reliefs that are open to them. People fear facing an HMRC tax investigation if they submit a self-assessment tax return that shows there is little or no tax to pay. This is not the case, but you do not know what you do not know.

HMRC has provided a friendly website page that helps you understand all about self-assessment tax returns.

It is important to note that the self-assessment tax year starts on 6th April and ends a year later, on 5th April. You will need to collect all your taxable earnings during this “Fiscal” tax year.

There are three key dates to bear in mind:

– 5th April: the tax year-end date for personal self-assessment tax
– 30th October: deadline date for submitting a tax return to HMRC in paper format (postal)
31st January: This is the ultimate deadline for submitting a tax return online. Please note that this is also the date on which tax liabilities must be paid.

You only pay tax once you have exhausted your personal allowance. A personal allowance for tax purposes is the amount of money you can earn before paying tax.

Personal allowances increase over time in line with Consumer Price Index otherwise known as CPI. The personal allowance for the tax year 2022/23 was £12,570. Any good accountants for property investors will be able to shed light on how to reduce your tax liabilities using the most basic techniques.

How to register for self assessment with HMRC?

Once you have identified that a tax return is submitted, you may need to register for tax with HMRC.

Before registering for self-assessment tax returns, you will need to obtain a Unique Tax Reference code (UTR). This ten-digit unique UTR may be obtained by requesting it from HMRC. The UTR is for each tax person. Your UTR tax reference code is unique to you.

You can contact HMRC directly on 0300 200 3310 to see if you already have a UTR or to request a new one. You can also request a Unique Tax reference code using the online self-assessment registration application process.

There are three options for you when registering for self-assessment:

not self-employed
registering a partner or partnership

UK landlords and property investors that need to register for self-assessment would use the “not self-employed” option. This is where our accountants for property investors can help you.

How do I do a self assessment?

As mentioned above that the UK tax year runs from 6th April to 5th April the following year. This means that you will need to collect all your forms of income between these dates.

It is important to note that your tax returns may be done by:

– You, using the online self-assessment tax forms
– An accountant or
– Tax advisor

For many people preparing and filing a UK tax return to HMRC is simple enough. Their tax affairs are not complex, and hiring an accountant would cost more than the benefits provided.

For people with more complex financial or tax affairs, it makes a lot of sense to hire an accountant/tax specialist to help prepare, review and submit your personal self-assessment tax return.

Having someone look over your shoulder should provide greater confidence and comfort that the numbers are correct.

The forms of income that you need to declare to HMRC might be as follows:

– Employment income: P60 and/or P45
– Employment benefits in kinds that are not subject to PAYE: P11D
– Pension income: P60
– Income (net) from buy to let property: gross income less costs
– Self-employment income (income less costs)

Once you have all this information, you will then need to populate this data into your self-assessment tax return if you are doing your own.

The deadline for the submission of self-assessment tax returns is as follows:

– 31st October if you are posting your paper tax return to HMRC

– 31st January if you are submitting your personal tax return to HMRC online

One of our specialist property accountants will be able to help you understand how to complete your UK tax return whilst minimising your tax liability.

How do I complete a landlord tax return? 

You need to complete a landlord tax return by 31st January each year through self-assessment.

The self-assessment tax return process is essentially the same whether you are a landlord, small business owner or sole trader.

The first step is to register for self-assessment by 5th October in the tax year following your first rental income.

You will get a Government gateway user ID and password when you register, enabling you to set up a personal tax account and manage your taxes online.

Once registered, you can file your tax return by filling out the self-assessment tax return form online.

The deadline for submitting your landlord tax return each financial year is 31st January for online tax returns.

To fill in your tax return, you’ll need information about all the income you’ve received throughout the tax year, as well as information about all expenses you want to deduct.

HMRC states that landlords need to record the dates a property was let out, all the money a landlord spent, and all rents received.

Landlords also need their UTR (unique taxpayer reference) number when they register for self-assessment.

It is vital to deduct all allowable expenses to work out your total taxable profit.

HMRC states that expenses need to be wholly and exclusively used for the purpose of renting out property.

When you fill in your landlord tax return online, HMRC’s system reacts to information as you enter it and removes sections that aren’t relevant.

UK landlords need to fill in the UK property section to tell HMRC about:

– rental income and other receipts from land or property
– income from letting furnished rooms in your house
– income from furnished holiday lets in the UK or EEA
– premiums from leasing UK land

HMRC will calculate what you owe and send you a tax bill.

HMRC provides helpful information on how to work out your rental income as a UK landlord. It is worth reading this material and then discussing it with your property tax consultants.

Book a call to see how we can help you.


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