Self Assessment tax returns: a guide for landlords 2020

As a landlord, there are a number of different types of tax you’ll have to keep in mind. Legislation is constantly shifting, but some of the main ones to consider are:

  • Income Tax
  • National Insurance contributions (NICs)
  • Stamp Duty Land Tax
  • Capital Gains Tax

Stamp Duty Land Tax and Capital Gains Tax only need to be paid when buying or selling a property – you can read more about them in our guide to rental property tax.

Income Tax and NICs are currently paid annually and are based on the income you make from renting out your properties. To pay your Income Tax and NICs you need to register for Self Assessment and complete a tax return each year.

Assents Property clients are Landlords who live abroad for 6 months or more per year, you’re classified as a ‘non-resident landlord’ (NRL) by HM Revenue and Customs (HMRC) – even if you’re a UK resident for tax purposes. Read more about NRLs.

For HMRC to class you as a ‘non-resident landlord’, you will need to submit an application to have your UK rental income without deduction of UK tax. For individuals, you will need to use a (NRL1) form.

Non-resident landlords will also need to complete a form (64-8) to authorise HMRC to deal with an agent to act on your behalf.

How does the Self Assessment process work for landlords?

The Self Assessment process is largely the same whether you’re a landlord, small business owner or sole trader.

Registering for Self Assessment

The first thing you need to do is register for Self Assessment.

Once you’re registered you can then file your tax return. You do this by filling out the Self Assessment tax return form either online or on paper – though the government is looking to do away with paper tax returns at some point in the future, so keep that in mind.

If you’ve created a limited company for the purposes of letting out your properties, the process is slightly different and you’ll need to register for Corporation Tax. You’ll then follow the process for paying Corporation Tax.

Tax return deadlines

The deadline for submitting your tax return for each financial year is usually 31 October for paper tax returns and 31 January for online tax returns. So for the 2019-20 tax year, the deadline for paper tax returns in 31 October 2020 and the deadline for online tax returns is 31 January 2021.

Once you’ve filed your tax return, you then need to pay the tax you owe. The deadline is usually the same as the final date for online Self Assessment tax returns, so the deadline for paying your 2019/20 tax is 31 January 2021.

Self AssessmentDeadline
Register for Self Assessment if you’re self-employed or a sole tradernot self-employed, or registering a partner or partnership5 October 2019
Paper tax returnsMidnight 31 October 2019
Online tax returnsMidnight 31 January 2020
Pay the tax you oweMidnight 31 January 2020

You’ll usually pay a penalty if you’re late. You can appeal against a penalty if you have a reasonable excuse.

Filling in your Self Assessment tax return

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 expenses you want to deduct. Your statement of account SOA from Assents Property will provide you with the necessary information.

It’s important to keep a record of all your income and expenses so that you can easily find it when you come to fill in your return.

You’ll also need your UTR (unique taxpayer reference) number, which is assigned to you when you register for Self Assessment. It’s usually printed on communications from HMRC regarding your tax return, but keep a note of it somewhere safe so you can easily find it when the time comes.

What are allowable expenses for landlords?

Though there have been some changes in recent years, there are still a number of expenses landlords are allowed to deduct from the cost of their tax bill. Some of the main ones are:

  • Property repair and maintenance costs
  • Replacement of domestic items (from April 2016)
  • Accounting fees
  • Insurance
  • Running costs

Depending on what costs your tenants take on board, you can also claim for:

  • Letting agent fees
  • Light and heating costs
  • Service charges
  • Ground rent
  • Cleaning costs
  • Advertising costs

Tax changes for landlords

The government often announce tax changes for landlords. While we’ve tried to provide an exhaustive list of everything you need to keep in mind for your tax return, exactly what you need to pay will depend on your particular circumstances and how things change in future.