It’s that time of year again for landlords to submit their self-assessment tax returns and to pay any tax due.
The deadline for calculating and paying tax on rental profits and capital gains for the tax year ending April 5, 2014 is midnight on January 31.
Anyone who should make a return but misses the deadline faces a £100 penalty, even if they owe no tax or are due a refund.
Landlords must file a SA100 core tax return and complete the UK Property Pages if they have any buy to lets or houses in multiple occupation (HMO) in the UK or furnished holiday lets in the European Economic Area (EEA).
If letting property is owned elsewhere in the world, such as the US or Turkey, then the Foreign Pages supplement of the tax return should be completed as well.
To file a tax return online, landlords must register for HMRC online services to receive an ‘activation code’ by post.
This can take up to 10 days to arrive and shortens the countdown to the deadline to just a few days.
Landlords should register as soon as possible at https://www.gov.uk/renting-out-a-property/paying-tax.
Last year, 1.3 million taxpayers missed the filing deadline, according to HM Revenue & Customs (HMRC).
Anyone who has received a notice asking them to complete a tax return must file one by midnight on January 31 or face the automatic penalty,’ said an HMRC spokesman.
The requests were sent out more than six months ago to most people who should file a return, so really there is no excuse for missing the deadline.
For those that miss the deadline, fines and penalties soon start to stack up.
After 30 days without paying tax you are charged 5% of the unpaid amount at that date.
Leaving payment another six months means an additional 5% of the tax unpaid at that date; leaving it more than 12 months means a further penalty of 5% of the tax unpaid at that date.
Interest is also charged on all outstanding amounts, including any unpaid penalties, until payment is received in full.
… LandlordZONE.
Article courtesy of LandlordZONE
