If you own a property in the UK but live outside of the country, you will have to file a self-assessed landlord tax return with the HMRC.
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HMRC uses self-assessment to collect income tax outside the PAYE system. In most cases, this tax is deducted automatically from wages, pensions and savings. But if you earn income outside the PAYE system where tax is not deducted at source, you must report it in a tax return. The same applies if you have a rental income from a property in the UK.
There are two options to consider when filing your UK tax return.
Firstly, you can file directly yourself with HMRC. But if you would like a hand filing your documents, you can also contact a tax agent – like Property Tax International – who can help you through the process.
In this guide, we are going to examine why it is so important to file your property tax return on time and show you how to easily file your documents online.
What are the property tax filing deadlines?
You usually need to register for self-assessment / inform HMRC that you have to file a self-assessment tax return by 5th October after the end of the tax year (i.e for 2020/21 tax year, this is 5 October 2021).
Most people choose to handle their self-assessment online, but you can file a paper return if you prefer.
The deadline to send a paper tax return by post to HMRC is 31 October after the end of the tax year (e.g. for 2020/21, this is 31 October 2021).
Online self-assessment tax returns must be submitted by 31 January after the end of the tax year (i.e for 2020/21, this is 31 January 2022).
Self-assessment tax returns for the previous tax year can be filled online (currently starting from 2017/18 tax year onwards); However penalties for late filing will be imposed.
What if I miss the deadline?
If you don’t file your UK property tax return on time, you may incur fines and penalties.
If you are up to three months late, there is a penalty of £100. After the three months, the HMRC will impose an additional £10 daily for the next 90 days, increasing the total penalty to £1,000. The fine is imposed automatically, regardless of whether you owe tax or not.
Where the failure is prolonged beyond six or twelve months, there are further penalties of either £300 or 5% of the tax liability on the return (whichever is the greater).
Additional fines for late payment
|30 days late||5% of the tax due|
|6 months late||5% of the tax due at that date|
|12 months||5% of the tax due at that date|
Are all property owners required to file a tax return?
Self-assessed tax returns are not just for the self-employed.
You are required to file a UK self-assessed tax return if:
- You are a landlord
- You are a commercial rental property owner
- You have £2,500 or more in untaxed income, for example from renting out a property (you need to contact the HMRC if your income was between £1,000 and £2,500)
- You have made a profit from the sale of a property (you have a capital gains tax liability)
What information will I need to fill in my UK property tax return?
Before you start the process, make sure you have:
- your Unique Taxpayer Reference (UTR)
- your National Insurance number
- P60 or other records showing how much employment income (if any) you received that you’ve already paid tax on.
- details of your untaxed income from the tax year, including income from renting out a property, self-employment, interest and dividends on shares
- records of any expenses relating to your rental income and/or self-employment income
- any contributions to pensions or charity which might be eligible for tax relief
Who can help me file my UK property tax return?
At Property Tax International our team of tax experts specialize in international property tax returns for overseas property investors.PTI provides a wide range of UK tax services for both investors and lifestyle property owners. We’re a registered agent with HMRC and have over 20 years of experience.
We take the pain out of self-assessment. With our help, you will never miss the deadline, pay too much tax, or find yourself on the wrong side of HMRC!
And the best part? The entire process is online!
Contact the PTI team today for a free, no-obligation quote for your UK property tax requirements.