I recently started renting out my first property (since June) and I am feeling quite overwhelmed with the Self Assessment tax return process. I have been looking for a clear, step-by-step guide, but I am struggling to find something that covers everything, like deadlines, how to submit the documents, and what exactly needs to be included.
I was considering hiring someone for help, but they are asking for £90 a month, which seems a bit excessive when I only need to file this once a year. Has anyone here done it themselves? If so, did you follow a specific guide or process that made it easier?
Also, I am worried about penalties if I make any mistakes on my own. For example, since I started renting in June, do I need to submit the return by December or January this year, or does it follow a different schedule?
Any advice or resources would be greatly appreciated!
You will certainly find a cheaper accountant. It is a relatively straight forward process, but piecing the requirements together to understand yourself can be a problem. I do my own now but had an accountant to do it before hand, so I had learned details from them.
Shop around. Look to pay £400 tops and this is still pretty high in my opinion.
Yes, every year since 1998 tax year. For property, I find it really straightforward.
Re the deadline, have you searched online for “when do i submit my tax return”? You’ll find all the info you need in the first search result from gov.uk
If you started your business in the 2024-2025 tax year, you won’t need to report this until after April 2025. Exactly when you have to report by depends on whether you file online or on paper. If you’ve never done a self-assessment before, you’ll need to tell HMRC that you will need to do one so that they can either send you a paper copy or you can register online. Do that now so that you are ready for next year. Having done paper and now online, I much prefer the latter as it’s all set out for you and the explanatory notes are built in. You can also immediately get an estimate of how much tax you’ll pay.
HMRC will only tax you according to the figures you submit. As long as you are accurate with your figures, there’s nothing to fear in terms of penalties. You tell them how many properties you have, how much total income there was and how much you spent on non-capital expenses (maintenance, replacing like-for-like, travel costs for inspections, referencing - search online for the govt’s guide to landlord expenses). They do the calculations for you. Pretty straightforward. If you do get something wrong, they might never even know. But if either you or they figure it out, you can work it out between you. I’ve had to do this in the past when I did make a mistake and it wasn’t onerous… although things may have changed in terms of their approach now.
If your first rental income was June 24, your first tax return will be 24-25 (6 April 2024 to 5 Apr 2025) due by 31 Jan 2026.
HMRC do webinars that you can go on. Google HMRC landlord webinars (if I put a link, the post will go for approval which takes days!).
If it’s a self assessment for 1 property, £90pm is way over the top fee-wise, I would say. I would say somewhere between £200 - £400 + VAT, depending on how good your records are and how straight forward it is.
I recommend the HMRC webinars if you have little idea of what goes in which box of your tax return. The webinars also give good guidance on what you can claim against income. I do my own returns as have had self assessment most of my adult life.
i hate all the paperwork so I keep record of ins and outs , give it all to my accountant and wait till he tells me the tax to pay. Have done so for 50 years
which, by the way, is an allowable expense so if you’re paying tax anyway, you might as well employ an accountant to do it for you as you’ll reduce your tax bill
Firstly, it is n’t just about filing in self-assesment.
You need to do a bit of ‘book-keeping’ keeping track of all expenses and income.
Youi shoudl scan all receipts and keep in date order.
You can use Excel to keep track of all the money you spend on and all the income you receive. I prefer scanned receipts in the file format yyyy mm dd
You need to organise all your expenses in the tax year 06 Apri; 2023 to April 5, 2024.
subscriptiohn to NRLA as valid expenses. Also extras like ICO etc…
If you do gardening for say 5 hours. You cannot pay yourself for this work. Unfair of the tax system.
Suggest you have seperate bank account for rental income. So not cluttered with personal stuff. Also a seperate credit card rental property expenses.
Bigger landlords would use accounting system such as Quickbooks, Xero etc…
When you sell the property you will need some of the information when paying Capital Gains Tax (or not!).
It’s not unfair of the tax system that you can’t pay yourself. If you pay someone to do the work, it’s taxable income for them.
So, if you ‘paid’ yourself, it would be taxable income for you, as the contractor. You would get a tax deduction from your rental profits, but have self employed taxable (and potentially NICable) income. The effect would be that you get tax relief on one hand and pay it on the other, so there’s no point!
Lots of good advice from other landlords, what a kind and friendly bunch on this forum. For what it’s worth, I keep very thorough records of income and expenditure and submit my self assessment online using Taxcalc, a user-friendly app which at £36 p.a. is money well spent in my view. I can’t see the point in telling an accountant what my income and expenses were just so that he can tell me what my income and expenses were and charge me a fee for doing so - but I only have one property and find it very easy to do the self-assessment using Taxcalc.