1st year's tax return

I’m doing my first year tax return, which I thought would be quite straightforward for an unfurnished 1 bed flat but I now think I could do with some bookkeeping software or an app.
Any recommendations please.

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The software I’ve seen is expensive and no easier to use than the HMRC self assessment website. Where are you getting stuck?


I was looking for some way of storing everything digitally

I store everything digitally, but I just use an excel spreadsheet laid out to mirror the boxes on the self-assessment form.


Thanks I’ll give that a go

If you’ve kept your accounts up to date, either digitally or manually, the self assessment tax return is a breeze, and comes with explanatory notes for each section. HMRC also have online tutorials if you need any support, and I’ve also found them quite helpful on the telephone.

Just check carefully what you are and are not entitled to claim as expenses against your income, then record your accounting of these expenses and income against the same categories as the SA tax return.

I’m not sure now, but if your income was below a certain level, HMRC only required a total expenses sum for deduction, without the need to fill in all the separate categories. However, it’s good for your recording of your properties performance to follow HMRC’s categorisation format of your expenses, to see the annual comparisons.


Thanks Chris,
No I haven’t kept my accounts up to date so it’s a last minute panic. I’ve always been an employee so no experience of SA. I’ve downloaded a spreadsheet from Landlord Vision so I’m doing that today.

@Stuart3 Have you registered for your Self assessment? I have just found out today it was meant to be done in October before you can submit the SA. :frowning:

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Get an accountant, it will be a lot less than you might think and their fees are tax deductible.

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Ive always been an employee, but I have been renting two properties for 3+ years now and actually found the accounting a doddle. I use an excel file - 1 sheet per property per year on which I put all the expenses including travelling expenses. I also have a totals sheet on the excel file , so I know at any point exactly where money is coming in and out. file. The HMRC self assessment is incredibly easy even if you cannot use excel.
It is important tho to note all your expenses as they occur and keep receipts. These can be photographed and kept in a folder on your laptop or PC with any hard copies filed safely somewhere. HMRC randomly check a selection of self assessment people per year and you never know when it might be you.
Keep yourself up to date with regulations and you will not need the expense of an accountant even if his expenses are tax deductible you are still paying at lest 80% of his bill!
I remember a seminar where the accountant said if she is just handed a big bag of crumpled receipts and notes and expected to sort everything her bill will reflect this. So even if you do use an accountant its worth getting everything sorted.


Sound advice Jennifer5,clearly you are maximising your returns which is the name of the game but each to their own.
For me the £250 a year is worth it for the totally hassle free experience.
My main income is PAYE and prior to being a landlord I have had numerous bruising and frustrating encounters with HMRC, they are a total nightmare to deal with, and I was trying to give them money back.
They genuinely almost caused a divorce in my house! :blush:
I never want to deal with them in person again.


Agree I have used an accountant for about 50 years .Peace of mind and tax deductable

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If you’ve only one flat, an accountant would be uneconomical.

It really is a doddle, as Jennifer 5 noted, certainly nothing to panic about, except the deadline for submission. Also the first payment is due by 31/01/21.

Just work through your expenses to match the SA forms categories, list your income and expenses under headings to correspond with the SA form sections, total them up and fill in the form.

I have 18 properties and sit down once a year for 3-4 hours, make up a spread sheet manually, which I find quicker than messing around with Excel assuming you can add up, and check over my expenses to correspond with the SA form ones, then fill in the SA form online. There really is nothing complicated about it. Using an accountant, you still have to collect up all your expenses receipts / bank payments etc. for them to do a bit of simple arithmetic, and form filling. As residential letting property is not considered business income, simply a pure investment income, you are not entitled to the business tax expenses and reliefs, therefore there is absolutely no complicated avenues to explore, where a tax accountant may save you money.

Assuming you have already registered, you will have received an SA form in the post with a very comprehensive explanatory document, to guide you through each section on the form, in case you are unsure of what you can claim for in your expenses. Also there is an HMRC online tutorial facility. I have always found the HMRC quite helpful when you are asking for advice about paying them money, and didn’t hesitate to phone them in the early days to confirm my entitlement to various expenses relief, since there is a dedicated line for such enquiries, I believe, if my memory serves me correctly.

Moreover, if you make a mistake, they are not going to hang you! It is highly unlikely anyone will ever audit your accounts for such a small portfolio income. I have never been audited in 21 years of operation, and with considerably larger sums for an 18 property portfolio. After 6 years your mistakes will have disappeared anyway, since you only have to keep your accounts for the previous 6 years.

In future, buy a plastic multi compartment file, and put your receipts into separate sections for each type of expense, marketing, repairs, cleaning, electricity, council tax, legal fees, ground rent, mortgage interest, etc. then you can fish them out and add them up for each section without having to sort through an unruly pile each year.

Also make an effort to get your tax return in soon after the end of your trading year, HMRC will calculate your tax liability and notify you of the payments, due on 31/07 and 31/01, set up a bank transfer for both payments and forget about it.


As an accountant, I would object to the assertion that all we do is a bit of form filling! I have nearly 30 years of training, experience and CPD, not to mention my own property portfolio, that make me an expert, not just a form filler!
I advise my clients on what they can and can’t put through. I tell them if I think they have expenses missing (amazing how many clients apparently don’t have gas certs or insurance until you ask them. Even worse, one that I asked for insurance, at that point, realised he’d completely forgotten to renew it. Don’t think the mortgage company would be impressed if it had burnt down!). I’ve had clients try and put deposits through as income. Many don’t claim mileage for rental-related trips until I tell them that they can. Not to mention interest! - I had to refile the prior year return on more than one new client because they hadn’t claimed interest on their own home mortgage that they had extended specifically to buy a rental property, and others that has claimed all of their residential interest rather than the restricted amount/split.
Whilst I agree that, if it’s simple and you know what your you are doing, you can do your own, and I have even trained a few (now ex!) clients how to do it because they were so simple, if you don’t know what your are doing, you can get yourself in real trouble.


I have registered. Now trying to find the log in details :thinking:

Thanks Jennifer I should be more organised from now on. I haven’t kept travel recipts as the flat is only 2 miles away although I did a lot of trips after a tenant died with no next of kin. He left the flat in a state full of junk & damage.

I was not belittling accountants, their competence or training, simply stating, in this instance, it was simple and not economical.

I was, of course, assuming a person entering into such a business was intelligent and competent enough to work out the basics of their business accounting and legal obligations regarding government legislation, which information is readily available, and easily accessed in this day and age of technology. They do, after all, have a responsibility to ensure they are conforming with their legal obligations, safety requirements, and conditions of their mortgage company, etc.

With all due respect, it would appear some of your clients shouldn’t even be considering business ventures, by the sounds of it.

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Fully agree with you Chris, I find the ignorance and incompetence of some of Cath2’s clients incredible. To employ an accountant to remind you to renew your insurance!!! Counting deposits as income!!! Not claiming mileage!!! It beggars belief. I do know many landlords who say they can’t be bothered and would rather pay an accountant and know it is done properly but personally for such a small effort I prefer to be in control myself. It would take me longer to provide all the information to the accountant and pay their bill than it takes to do it myself!!


Oh Jim that sounds dreadful, I’ve always found HMRC to be a little incompetent and difficult to contact but they’ve always understood and been helpful in the end. I suppose it does depend which person you get at HMRC. I hope the future goes better for you.

Stuart3 It must be really annoying when a tenant does that. I have been so lucky with my tenants to date.

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