Earlier in the year we heard about a tax crackdown from HMRC to ensure that landlords were managing their tax liabilities properly, and Friday saw the announcement of a further crackdown, this time on landlords who aren’t paying up in time. Those in the South-East are being specifically targeted. So, what should you do if you think you owe tax to the Revenue or if you’re not sure when to pay up?
Individuals with Rental Income
If you’re someone with just a small property on your books or you have lodgers who provide you with a rental income, you should have filed your tax return for the year ended April 2012 at the end of October or, if you’re filing online January. Your return will state your liability and any tax you owe should have been paid by 31st January 2013. For previous years, tax should already have been paid, and you’re likely to find yourself with a penalty.
Those who let property through a limited company will have a slightly different set-up, tax falling due nine months after your tax year end. In some cases this might be different to your accounting year, if, for example, you have recently established a property business. If you have a large property business you may be required to pay tax quarterly, in which case you will need to make income estimates and, probably, talk to a financial advisor about your situation.
Tax liabilities are one of those things that your rent guarantee insurance policy is very unlikely to help you out with and it’s firmly your responsibility to ensure everything is paid up on time. After the very public dressing-down that tax authorities have had over the last year, it’s no wonder than HMRC are sharpening up their act. Don’t get caught out – make sure you’re compliant with the tax authorities at all times.