Landlord Tax returns to be done quarterly?

[Grampa]

I have heard that landlords earning more than 10k pa rental income may soon have to submit some form of tax/income return to HMRC electronically on a quarterly basis in the same manner similar  to a vat return.

The very little I know about this at the moment would/could mean its has to be done in a certain format which could potentially mean obtaining specialised software. 

I heard about this in a very brief conversation with an accountant. 

I guess as an agent it is something our professional software may be adapted for that we could do for landlords, at a small charge 😁

Has anyone else heard about this? 

 

 

[Richlist]

I remember reading about this sometime over the last year.

I think it was a proposal being considered by the Gov' but it hadn't got anywhere near to being passed and as the Gov' have been somewhat busy with other important emergencies it got kicked into the long grass. It wouldn't surprise me if it's been resurrected as they need all the income they can get, as quickly as possible.

Out of interest, they already have this system of quarterly tax returns in Spain.....it's hated. Owners of rental property in Spain who are UK residents, are since Brexit, no longer able to offset any expenses and the tax rate is 24%. Makes a UK landlords lot look a lot more attractive eh ?

[kanrent]

TMD (tax made digital ) the brain child of George Osborne I belive. 

As from April 2024

Landlords and small businesses with a GROSS income of more than 10k, it will be mandatory 

[kanrent]

On 4/4/2022 at 2:34 AM, Richlist said:

I remember reading about this sometime over the last year.

I think it was a proposal being considered by the Gov' but it hadn't got anywhere near to being passed and as the Gov' have been somewhat busy with other important emergencies it got kicked into the long grass. It wouldn't surprise me if it's been resurrected as they need all the income they can get, as quickly as possible.

Out of interest, they already have this system of quarterly tax returns in Spain.....it's hated. Owners of rental property in Spain who are UK residents, are since Brexit, no longer able to offset any expenses and the tax rate is 24%. Makes a UK landlords lot look a lot more attractive eh ?

I think it was delayed a year due to the kung flu pandemic 

[kanrent]

On 4/4/2022 at 2:02 AM, Grampa said:

I have heard that landlords earning more than 10k pa rental income may soon have to submit some form of tax/income return to HMRC electronically on a quarterly basis in the same manner similar  to a vat return.

The very little I know about this at the moment would/could mean its has to be done in a certain format which could potentially mean obtaining specialised software. 

I heard about this in a very brief conversation with an accountant. 

I guess as an agent it is something our professional software may be adapted for that we could do for landlords, at a small charge 😁

Has anyone else heard about this? 

 

Being computer illiterate I would be OK about my agent keeping and filing digital records every 3 months on my behalf, don't forget its all income so even a person's old age pension if you get one will be included in effect you will become an accountant as well as a letting agent

[Grampa]

UPDATE; (From the Guild of Residential Landlords https://www.landlordsguild.com/ )

Making Tax Digital For Landlords

April 6, 2023 is the date when anyone making more than £10,000 a year from property should be ready to start recording and filing online. For landlords, that £10,000 figure refers to rental income, not profit.

It’s not just a case of switching over to a new online tax reporting system. You must be ready for the big day in April 2023 by signing up to software which aligns with HMRCs online process.

Plenty of landlords favour spreadsheets and it’s fine to continue with these. You can also keep writing up your accounting ledgers too if you like. But, to comply with HMRC’s new rules, you must also keep digital records. The reason for this, says the government, is to prevent mistakes. They believe the digital records will cut out mistakes from HMRC and landlords.

Once you’ve set up your chosen software you can update your income and expenses as you go– and on the move, if you have a mobile app. Not only that, but you can see instantly what your business is spending and bringing in.

Regular reporting should stop landlords spending hours slaving over the dreaded annual self-assessment tax return every year because they tend to leave tax until the last minute.

Updating your accounts as you go should mean you are less likely to miss out on expenses because you’ve lost receipts. You can also keep a better eye on cash flow and it is easier to share tax details with your accountant or letting agent since they’re all in the one place.

You’ll send HMRC quarterly updates of your income and expenses via your software and HMRC digital tax account. It could be as simply as clicking a button. Essentially it allows your tax to be calculated as you go.

At the end of the year, instead of sending in a self-assessment tax form, or getting your accountant to send in a limited company tax return, you sign a declaration that your quarterly returns are accurate. You’ll then have until January 31 the following year to pay your tax, as usual. Landlords and property companies will have up to a month after the end of every quarter to send in their MTD information.

For failure to comply with MTD, which is mainly late-filing accounts and returns, taxpayers will be given penalty points. How many points depends on how late the filing is with the first penalty points marked up after the filing is 15 days late.

Eventually, the points stack up for persistent late filers, just like points on a licence for drivers. Then, a financial penalty is imposed. After two years, the penalty points are reset to zero. Late payment penalties also click in after 15 days, double after 30 days and continue with charges mounting daily. Interest is charged on outstanding amounts from the due date.

Six software providers have been approved by HMRC, with another three have packages in development aiming to go online before the launch date of MTD for landlords in 2023.

[bil8999]

Great more hassle

[Richlist]

Only time will tell how this turns out.

In Spain, in my particular area it's had the effect of reducing the number of available rental properties as people don't want the effort & expense involved.

I think the situation is completely different between professional landlords with 10,20,30 or more properties and those landlords with 1 or 2 properties. There are an enormous number of landlords with just 1 or 2 properties in the UK that may decide it's time to sell up or incorporate.

Many of us don't use a lettings agent or an accountant so the transition will likely be difficult.

[Carryon Regardless]

On the face of it this is causing us to comply as we should anyway.

For me it feels like big brother going too far. I don't spend hours doing my annual return as my spread sheets are pretty close to being updated weekly. So 4 times a year I now need to set aside the time to comply with more legislation, this after I have been caused to buy another software package and learn it.

Will this improve things for the nation? Is there a justified reasoning?

[kanrent]

Should check that date again I heard it will start April 2024 because of the pandemic 

[kanrent]

On 4/4/2022 at 2:02 AM, Grampa said:

I have heard that landlords earning more than 10k pa rental income may soon have to submit some form of tax/income return to HMRC electronically on a quarterly basis in the same manner similar  to a vat return.

The very little I know about this at the moment would/could mean its has to be done in a certain format which could potentially mean obtaining specialised software. 

I heard about this in a very brief conversation with an accountant. 

I guess as an agent it is something our professional software may be adapted for that we could do for landlords, at a small charge 😁

Has anyone else heard about this? 

 

 

https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-businesses-and-landlords/extension-of-making-tax-digital-for-income-tax-self-assessment-to-businesses-and-landlords#:~:text=Businesses%2C self-employed people and,tax year exceeds £10%2C000

[Richlist]

Oh good. By April 2024 hopefully I'll have retired and be relaxing in the Caribbean on a sun drenched beach, sipping on my gin & tonic and wondering what to spend my money on next !

[bil8999]

3 hours ago, Richlist said:

Oh good. By April 2024 hopefully I'll have retired and be relaxing in the Caribbean on a sun drenched beach, sipping on my gin & tonic and wondering what to spend my money on next !

Mmm, how much will i need to fund your future life style

[Grampa]

8 hours ago, kanrent said:

https://www.gov.uk/government/publications/extension-of-making-tax-digital-for-income-tax-self-assessment-to-businesses-and-landlords/extension-of-making-tax-digital-for-income-tax-self-assessment-to-businesses-and-landlords#:~:text=Businesses%2C self-employed people and,tax year exceeds £10%2C000

Thanks for that Kanrent, the Website I was on needs to update their articles.

 

[Grampa]

6 hours ago, Richlist said:

Oh good. By April 2024 hopefully I'll have retired and be relaxing in the Caribbean on a sun drenched beach, sipping on my gin & tonic and wondering what to spend my money on next !

Already got my cruise there booked in for January🌤️😎

[Melboy]

"The government has been clear that if a business cannot go digital, it will not be required to do so".

I would like to see the criteria that permits me to do this.   😃

 

[Richlist]

You could probably find an island in the Caribbean where Wi-Fi just doesn't work.......that sounds like a very reasonable excuse.

PS.

I'm one step nearer retirement......as I picked the winner in the Grand National yesterday at 50:1