Why Submitting Your Self-Assessment Tax Return Early Could Pay Dividends for Landlords

If you’re an Edinburgh landlord, what’s the best time to submit your annual self-assessment tax return and is there any advantage to doing it early?

If you earn money from rental property in the city, you need to complete a tax return every year detailing your income and expenditure. Online returns for the 2022/23 year should be completed by 31 January 2024, but there are benefits if you complete it before the deadline.

Avoid A Fine

Getting it done as early as possible means there’s no chance you’ll forget and miss the cut-off, which automatically incurs a £100 fine even if you don’t owe any tax. Filing early allows you to plan your finances more carefully, taking account of the amount owed that will need to be paid.

If you choose to complete a paper return, the deadline is three months earlier (31 October 2023) and you also need to submit your return earlier if you want HMRC to collect your tax through your salary or pension.

Spread The Cost Of Your Tax

Many people chose to spread the cost of tax this way as it means you don’t need to pay it in one lump sum by 31 January 2024, and you don’t start paying until the new tax year begins on 5 April. However, to benefit from this you must submit your online return by 30 December 2023.

HMRC also offers a Budget Payment Plan where you can choose how much and how often you want to pay by direct debit, giving you full control of managing your bill. You can also pause payments for up to six months if you need to. Full details can be found on the gov.uk website.

A tax return provides proof of income, which you’ll need if you want to apply for a mortgage, loan or other finance. You’ll also need to provide proof of income if you’re applying for benefits such as Tax-Free Childcare.

Get An Early Refund

If you paid too much tax in the 2021-22 financial year, submitting your 2022-23 tax return early means it will be processed more quickly and you’ll receive a refund earlier. If you wait until the deadline, that’s money you could have banked months before.

Beat The Rush

January is the busiest time of the year for the tax office so if you wait until the last minute to submit your return and then run into an issue, it will be harder to get through on the telephone to discuss your problem. Submitting the return early means you’ll have longer to resolve any issues.

Doing your tax return online is quick and easy – 97% of people used this method last year. But make sure you register with HMRC and get your Unique Taxpayer Reference (UTR). Beware of online scammers and never share your personal information over the telephone. Find out more about phishing and scams on the gov.uk website.

Know What You Can Claim

When you file your self-assessment tax return, make sure you know all the allowable expenses you can claim:

• Any water rates, gas, electricity, and council tax that aren’t paid by your tenants
• Maintenance and repairs on your rental property
• Insurance – buildings, contents, and public liability
• Services that are part of your tenant’s rental contract, such as gardeners and cleaners
• Annual boiler servicing
• Stationery, postage and printing in association with your rental
• Use of your car to visit the property – you can claim 45p per mile for the first 10,000 miles

If you need help with understanding your tax liabilities as a landlord, Clan Gordon’s expert property managers can help you find the advice you need. We’ve been supporting Edinburgh landlords for more than 15 years and offer an award-winning service. Click here to schedule a call with one of our experts.