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Landlord tax deadline fast approaching

19 November 2014

Tax DeadlineBuy to let property investment is booming with an estimated 2 million landlords letting out almost one in five homes in the UK, according to official statistics.*

The army of landlords is growing faster than any other property sector, says the Office of National Statistics and buy to let mortgage lenders.

And lenders claim next year’s flood of over 55 year olds who can access their pension cash early is likely to swell their ranks as they switch their cash into property.

But the rising number of landlords is leading to concerns that many concentrate too hard on marketing and managing their properties and spend too little time on keeping good financial records and keeping up with their tax returns.

Aldermore, a niche buy to let lender, is warning entrepreneurs, including landlords, to keep their eye on their finances.

The deadline for filing self-assessment tax returns and paying income tax on rental profits for the tax year ending April 5, 2014 is fast approaching.

Landlords must report any rental profits and capital gains from disposing of investment property in the year to that date on or before midnight on Saturday, January 31, 2015. Any tax due must also be paid by then.

Landlords must file a return if they are sole or joint property owner, in a business partnership or a property company director.

If HM Revenue & Customs (HMRC) have asked a landlord to complete a tax return, they must file online even if no tax is due. Filing a tax return after the deadline triggers an automatic £100 fine.
Other penalties and interest are applied to late payments of tax.

A common excuse for filing late is the figures for completing the return were not available by the deadline.

For landlords with this dilemma, file the tax return with estimated figures and pay any tax due.
Make a note in the additional information box that some figures are estimates, explaining why and giving a date when the actual figures should be available so the return can be amended.

This way, any late filing penalties are avoided and any over payment of tax will be refunded with interest.

*Souce: The Private Rented Sector Trends survey from buy-to-let mortgage lender Paragon Mortgages