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Originally Posted On: https://www.thelandlordworks.co.uk/blog/post/Self-assessment-tax-returns–a-user-guide-for-landlords

Self-assessment tax returns are due on the 31st of January 2022. Read on to discover what you need to know before submitting your self-assessment tax return, alternatively submit your self-assessment tax return with the support of GoSimpleTax quickly and efficiently here. 

Understanding your personal allowance
The first £1,000 of your income as a landlord is a tax-free ‘personal allowance’. If the income you make from renting your property is lower than £1,000, you aren’t required to submit a self-assessment tax return.

You must submit a self-assessment tax return if you earn £2,500 to £9,999 after allowable expenses, or if you earn £10,000 or more before allowable expenses.

What can be expensed?
Allowable expenses let landlords claim the cost of things you need to spend money on day-to-day to run your property, reducing your tax bill. It’s important to note that there are different rules for residential properties, furnished property lettings and commercial properties.

If I have a residential property:

Allowable expenses include things such as:
• letting agents’ fees;
• accountants’ fees;
• utility bills, like gas, water and electricity;
• ground rent and service charges;
• council tax;
• maintenance and repairs to the property;
• buildings and contents insurance;
• cleaning services.

If you’re registered as a limited company, you can claim interest on your mortgage as an allowable expense. If you’re a private landlord that is not registered as a limited company, this is not accepted.

What isn’t included?
Generally, anything that is considered to be a cost to improve your ‘capital expenditure’ cannot be expensed. This includes:

The purchase of a new property;
property renovation costs;
property extensions.

If I have a furnished residential letting:

If you have a furnished holiday letting, you may be able to claim for ‘wear and tear’ allowance:

for the 2015 to 2016 tax year for individuals;
on or before 31 March 2016 for companies.

If I have a furnished holiday letting:

If you have a furnished holiday letting, you may be able to claim for Capital Gains Tax relief and capital allowances if all of the following apply:

the property is offered for at least 210 days per year;
it’s let for more than 105 days per year;
no single let is more than 31 days;
you charge ‘market value’ for your property.

You can find more information from the government on capital allowances and furnished holiday lettings here.

How do I work out my profits?

To find out your profits for a residential property or furnished residential property, you can add together all of your rental income, add together all of your allowable expenses and subtract the expenses from the income.

HMRC-recognised software such as GoSimpleTax allows landlords to track their finances online and submit their self-assessment tax returns directly to HMRC, with continued support. We’re currently offering landlords a 30% discount for GoSimpleTax software to help you get ready for tax return season.

Summary
Self-assessment tax return season is around the corner, and it’s important for landlords to submit their returns on time. Before making any financial decisions, it’s important to seek the help of an experienced financial professional.