Self-Assessment deadline approaches

admin    Uncategorized     agents

Landlords’ Tax:

New landlords should be aware that they need to register with HMRC for self-assessment and file a tax return no later than 31^st of January next, and landlords will so need to get geared-up for Making Tax Digital (MTD), a new way to file your tax return.

Anyone earning more than £2,500 in income from renting out property during the 2017-2018 tax year (6^th April 2017 to 5^th April 2018) must register with HMRC before the 5^th of October, just a week away as this is published.

By registering on time you will make sure that you comply with the law and have a User ID and Activation Code in good time for filing in January.

Your Personal Tax Account

HMRC has introduced this new service to allow everyone to manage their personal tax affairs through an online Personal Tax Account. It provides a convenient way to view and manage your tax affairs in one secure place. There are a range of services available currently and HMRC say there are more being added all the time.

You can use your personal tax account to:

• check your Income Tax estimate and tax code
• fill in, send and view a personal tax return
• claim a tax refund
• check and manage your tax credits
• check your State Pension
• track tax forms that you’ve submitted online
• check or update your Marriage Allowance
• tell HMRC about a change of address
• check or update benefits you get from work, for example company car details and medical insurance

Visit the HMRC website to sign in or set up your Personal Tax account

HM Revenue & Customs (HMRC) has been phasing in the use of online personal tax accounts for some time now but from 2020 onwards, all UK taxpayers (business and personal) will be required to manage their tax affairs online as part of the government initiative – Making Tax Digital (MTD).

While the staging dates for MTD are being staggered for different groups, to make implementation as smooth as possible, the government is encouraging taxpayers to go digital sooner rather than later. Users are being invited to sign up when they log in to their HMRC online services account or via the GOV.UK website.

What Landlords Need To Know about MTD

Making Tax Digital is the Government’s plan to transform the current tax system into a fully digital service, and landlords are among the first to be affected.

From April 2019, incorporated landlords with incomes above £85,000 (the current VAT threshold) will be expected to keep digital records for VAT purposes. You will also have to submit your VAT return to HMRC through MTD compatible software which will pull information from the digital records.

HMRC will be providing a list of approved accounts software suppliers, which will no doubt include the main-line tax accounting software providers.

Unincorporated landlords and small businesses with an annual turnover between £10,000-£85,000 will be required to join at the income corporation tax phase, which is likely to be April 2020. At this time you will be required to:

• Keep digital records detailing, dates, rental values, income and expenses.
• Send quarterly reports to HMRC using third party software, summarising your business’s income, expenditure and profits.
• Make an end of year declaration (after any necessary adjustments).

All of this will be done through your personal tax account which will securely store all of your tax records. When properties are owned by a partnership, submissions will be made to a business digital tax account by a nominated partner. In a jointly owned property, each individual who receives income will need to report it separately.

This is a major change to the way the UK tax system operates and landlords will be right at the heart of it. The sooner you get registered and in the swing of things the better. HMRC says the advantages of this are:

• An end to manual submissions means fewer mistakes and serious time savings.
• Quarterly reports will show you how much you owe in real time.
• You’ll have a single picture of your liabilities and entitlements through your personal tax file.

Software providers will be working with HMRC to make sure their tax accounting software is compatible with MTD to make the process as smooth as possible for users.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Self-Assessment deadline approaches | LandlordZONE.

View Full Article: Self-Assessment deadline approaches

If you enjoyed this article please consider sharing it!