Landlord Tax Return Example: Everything You Need to Know

Being a landlord several responsibilities, including completing the annual tax return. If you earn money by renting your property, you must inform HMRC about your income to pay Income Tax and National Insurance on the profits.

You might get confused, but submitting your tax return as a landlord is simple as long as you’ve been tracking all the correct information. Here in this guide, we’ll share a landlord’s tax return. You will also learn to determine your income after expenses and break down the necessary information. So, let’s get started.

This guide is packed with insights—check out the sections below to find exactly what you’re looking for.

• What Amount of Tax a Landlord Pay?
• How Can I Pay my Tax?
• How do you declare rental income on your tax return?
• Claim Your Eligible Expenses
• Finalise and Submit Your Return
• Self-Assessment Questions
• Claiming a tax refund

What Amount of Tax a Landlord Pay?

Being a buy-to-let landlord, you must inform HMRC about your income from renting out properties throughout every tax year. You will be charged income tax and National Insurance contributions for all the money you have made.
You will also be subject to other taxes as a buy-to-let landlord, such as Stamp Duty Land Taxes and Capital Gains Tax, but you will only have to pay these when you buy or sell the property.

How Can I Pay my Tax?

To pay taxes and declare income, you must register for self-assessment and complete a tax return before the deadline reach. If you submit paper forms to HMRC, then be ready to fill out forms SA100 and SA105 for landlords, which showcase your earnings from renting out your properties.

Let’s understand with an example of what a paper SA105 form looks like

Suppose you are completing your Self-Assessment tax return online. This will make the process easier as you won’t need to fill out forms separately. You only have to enter all info on the above SA105 example when you respond yes to digital questions about owning or renting out properties.

It is best to submit your Self-Assessment tax return online as it is the fastest and easiest option.

How do you declare rental income on your tax return?

To file your SA105 tax return, you will need certain information about income and expenses throughout the year. Before filing, keeping a record is necessary so everything is set up when you have to file.
– Have your Unique Taxpayer Reference (UTR) on hand: You must let HMRC know.
– How many properties do you currently rent out
– The dates on which you rent out
– Any money you spent on the rental property
– Any relief you currently claim, like renting a room, relief
– The amount you receive in the rent.
For the whole year, you will need to keep documentation to prove these figures, including.

• Contracts
• Bank statements
• Receipts for necessary work as part of maintaining property
• Documentation showing when you received the property.

Speak to a professional adviser if you need clarification on any term related to Self-Assessment Tax Return.

Claim Your Eligible Expenses

You only have to pay taxes on your rental profits. Your rental profit is the rental income minus the allowable expenses related to your letting. If you make no profits, there won’t be any tax to pay. Being a landlord, you can take away various allowable expenses from the income to calculate your profit over the tax year.

The rules on what you can expense as a landlord can change yearly, so consult professional tax advisers if you are still determining what amount you can and can’t. But luckily, there are expenses for which you won’t get taxed.

• Insurance of landlords
• Mortgage Interest relating to the property
• Maintaining the property cost (not including any improvements to the property)
• Estate agents, accountants and solicitors fee.

Once you have all the information about the expenses you can claim, you can deduct them from your rental income and determine your profit.

Finalise and Submit Your Return

As discussed earlier, if you submit a paper tax return, you must submit SA100 and SA105. Submitting your return online is easier, though, as the dynamic form adds and removes sections to ensure you disclose all the relevant information.

After submission of the self-assessment, HMRC will show you how much income tax you owe and send you your tax bill. You will get it in the post if you fill out the paper tax return or in HMRC’s online system if you submit your tax return online.

Self-Assessment Questions

Here are the answers to your queries regarding self-assessment

When Should I Need To Register For Self-Assessment?

If this is your first time submitting your tax return, let HMRC know by October 5. You can do it online by phoning HMRC or completing a form and posting it directly to HMRC.

Is there a need to file a tax return if HMRC hasn’t been contacted?

Yes, it’s mandatory to determine whether you need to complete a Self-Assessment tax return. If HMRC hasn’t contacted you, you should inform HMRC to file a return.

This is necessary if you:

• Self-employed with gross income exceeding £1000
• Earned less than £1000 but want to pay Class 2 National Insurance Contributions voluntarily.
• If you are a new partner with a business partnership.
• Have untaxed income over £2500.
• Receive Child Benefit payments, including you and your partner’s income over £50,000 and require paying the High Income Child
  Benefit Charge.
• If you are unsure whether to file, use HMRC’s free tool to check.

3- When I file my self-assessment tax return, do I need to pay my tax bill?

If someone files in October, the deadline for paying tax is January 31. However, you can set up a budget payment plan to spread the cost of your tax bill through regular payments, which can help you manage your finances better.

Do I need to file a return if I don’t owe any tax?

Yes, filing a self-assessment is mandatory even if you don’t owe any tax. Some examples of why self-assessment is necessary include

Claiming a tax refund

Claiming relief on charitable donations, business expenses and pension contributions.
If you want to pay voluntary Class 2 National Insurance Contributions to maintain your eligibility for certain benefits and state pension.

Wrapping Up

Handling your taxes as a landlord is quite a difficult task. It is essential to save money, boost profits, and comply with HMRC’s rules. Keep records of what you earn and spend, and submit your tax return before the deadline. Also, seek advice from tax professionals whenever you need assistance with your returns.

Doing such things allows you to manage your rental property finances without any headaches, making your buy-to-let property an innovative and profitable investment.