Owning a rental property can be a dream come true for many. It provides a steady return and is an essential asset in your portfolio. However, being a landlord is not easy. Renting out your property is one of the many things you need to take care of during your rental home ownership journey. You would need to pay taxes on the rental income you earn by leasing out your house.
In saying that, property tax can be pretty complicated, and it is best to hire the services of a specialist property tax advisor, to help you out with your taxation issues. Getting external
self-assessment& tax returns consulting will ensure that you file your taxes properly. Let’s look at a few things to consider when filing tax returns for your rental property.
Register for Self-Assessment
You’ll need to register for self-assessment and complete a return if you make more than £1,000 in rental income. You can consult your property tax advisor to determine the amount of tax you’d need to pay on your rental income. You need to create an online account or sign in using the government gateway to register yourself.
You can either register online or use a physical SA1 form to complete the registration. Once the process is complete, you’d be provided with a Unique Taxpayer Reference (UTR) number. Keep the UTR safe as it will be needed for all tax correspondence.
You need to be very careful with deadlines as HMRC is pretty strict on businesses that fail to file their taxes on time. You have until midnight of 31st October to file your paperwork with the HMRC. If you prefer to file your taxes online, the deadline is 31st January, the following calendar year. Clear any tax dues or advance payments towards your tax bill. You can avoid late payment penalties by hiring a chartered tax advisor who can handle your complex taxation matters.
There are legal ways to reduce your tax bill. You can claim several deductions as a property owner that can reduce the amount you pay in tax. Property repair and general maintenance costs are deductible expenses and the property’s running costs, including the council tax, water rates, and utility bills. It is better to work with an accountant who can advise you on the type of deductions you can claim to avoid errors on your tax returns.
If you’re looking for one of the best personal tax advisors in the UK, hire IBISS & CO.We can help you with your property tax needs and ensure that your tax bill is as small as possible. We will provide personal tax advice and can help you with your landlord self-assessment tax return, inheritance tax planning, non-resident landlord self-assessment, etc. Contact us today for all your rental income taxation needs.