The deadline for self-assessment tax might be 31 January 2021 but that doesn’t mean you should wait until then to submit. If you’re a landlord and haven’t already completed a tax return, get it done now.
When did you first say to yourself, “I really ought to get my tax return done?” Probably back in the summer, right? And the chances are it’s still haunting your to-do list as Christmas approaches.
Because we live and breathe tax returns, we’re only too aware that people often end up white-knuckling it, against their better judgement.
In fact, HMRC publishes a handy statistical round-up every year which shows just how common it is to file at the last minute or, worse, after the deadline.
The most recent stats, from February this year, show that for the 2018/19 tax year:
- 958,000 taxpayers missed the filing deadline
- 702,000 taxpayers filed on 31 January itself
- 26,000 completed their returns in the very last hour of 31 January.
Why don’t people file earlier?
From talking to hundreds of clients over the years, we understand all too well why people so often end up filing at the last minute.
First of all, landlords who are doing their own tax returns often dread having to deal with HMRC’s notoriously unreliable self-assessment portal, and with HMRC itself.
They live in fear of making a mistake – failing to pay enough tax, paying too much, ticking the wrong boxes and getting in trouble.
So, as tends to happen with any unpleasant job, they keep putting it off.
That’s especially true of accidental landlords who, until they acquired their first flat or house, had never had to worry about self-assessment. For them, tax was something that got taken out of their pay packet through PAYE, and that was that.
Others who are more experienced, and maybe own more rental properties, are just too busy, despite their best intentions. That’s especially common with entrepreneurial types for whom property is just one income stream among many.
If you’re running a business, or even multiple businesses, and have a family to fit in, too, it can be difficult to carve out time to concentrate. Perhaps that’s why about 3,000 people each year file their returns on Christmas Day itself.
Part of our job as accountants is to prevent this kind of thing being necessary, giving clients the hands-on support they need to get it out of the way well before it becomes an issue.
In theory, you could submit your personal tax return any time after the start of the new tax year, on 6 April.
That’s a bit too early for most people but we certainly do encourage clients to file as early as possible – and we help them do it.
Our approach to landlord tax returns
First, we make sure the process is as simple and transparent as it can possibly be:
- We give you a nudge and remind you of the deadlines.
We know nobody likes to be nagged or chased so we keep it simple – just a quick email or message from your contact here at UK Landlord Tax to start with. We’ll also give a few more reminders throughout the year.
- We tell you what we need.
The reason we’re able to offer competitive pricing is because of our focus on efficiency. As part of that, we’re always very clear with clients about which records we need at any given point, saving a lot of back and forth and scrambling about.
- You get your records together, ideally electronically, and send them to us.
The tidier and more comprehensive your financial records are, the better. Clients who’ve worked with us for a while tend to be really good at this because they’ve seen how easy it can all be.
- We ask any follow-up necessary questions.
As quickly as possible, we’ll review what you’ve provided and identify any gaps, potential issues and opportunities. We’ll then come back to you with specific questions so we can keep things moving.
- We identify tax reliefs and allowances.
This is the fun bit – it’s how we reduce your tax bill and save you money. It’s also where being organised and allowing plenty of time really pays off. That’s because the longer we have, the more likely it is we’ll be able to conduct a really detailed review and find things you or your previous accountant might have missed.
- We prepare your return for your approval.
Bringing it all together, we run the tax calculations, complete the HMRC forms and share the end result with you for sign-off.
- We submit it to HMRC on your behalf.
Once you’re happy with your tax return, we hit ‘Submit’. It feels really great to have this out of the way by, say, September each year.
- We deal with any routine follow-ups from HMRC.
This is yet another good reason to file as early as you can: if HMRC has questions or queries about your return, we’ll have plenty of time to deal with them.
More benefits of an early tax return
The single biggest benefit of filing early is the opportunity to plan.
Remember, you don’t need to pay your tax bill at the moment you submit your return, and if you know what your tax bill is going to be months in advance, you can budget and save for it.
Getting your tax return done in good time generally means you’ll get any tax refund you might be owed earlier, too.
Our clients also enjoy a discount on their fee if they file before the peak kicks in, from November through to January.
If you want your tax return sorted quickly, easily and early next year, get in touch.