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6 Essential Tax Tips for Landlords

16 May 2016

6 Essential Tax Tips for Landlords
Self-assessment tax return reminders will soon start plopping through letterboxes.

Do-it-yourself tax filing is not difficult, providing you know what figures to put in the boxes and have collected the right financial information during the year.

Here are some essential tips for landlords who want to take on the responsibility of completing their own tax returns:


  1. Get the right year – Current tax filing year is April 6, 2015 until April 5, 2016.
  2. Apply the right tax rules – None of the recent changes in property tax announced by Chancellor George Osborne are in force for the 2015-16 tax year. The main change this year was the rules for working out wear-and-tear relief, which started from April 6, 2016. The punitive lack of relief for unfurnished buy to lets was still in place, so HMRC will not entertain claims for replacing freestanding white goods or furnishings such as carpets. Landlords with furnished buy to let homes can claim 10% wear and tear allowances until April 5, 2016. Mortgage and finance interest relief changes do not start until April 6, 2017.
  3. Make sure every owner files a return – Owners are the people that benefit from rents or capital gains, the people who are entitled to the money. They should all make a return even if no tax is due. A common scenario is mum and dad own the house but let a child keep the rent for managing the property. This does not mean the parents should not file tax returns as the beneficial owners.
  4. Check out free online help from the tax man – HMRC has a new course explaining what expenses landlords can claim. The information is straightforward and basic, so is probably of more use to new landlords than more established investors
  5. Download the property tax toolkit – Aimed at tax professionals, the toolkit is HMRC’s crib sheet which walks through landlord tax returns and points out common errors and how to avoid them
  6. Register with HMRC online – If you do not have a UTR – a unique tax reference – you cannot file a tax return online. The online application process takes a few days, so sign up as soon as possible and the job is done. Registering late can mean delaying online filing if you leave the job until the last minute.