It’s the time of year that every self-employed person dreads – the end of the financial year and the time to calculate and pay your taxes. Landlords need to be especially careful this year when it comes to paying the right amount of tax as the HMRC have said that they are planning on cracking down on all buy-to-let landlords that do not declare all the money they receive in rent payments. Therefore, the Landlord Syndicate is now offering advice to all landlords so that they can keep on top of their finances and pay their taxes quickly and easily.
Amer Siddiq, member of the Landlord Syndicate and managing director of Tax Insider, advised: “If you haven’t done so already, the first thing you need to do is register for self-assessment. If you have been disorganised and not kept on top of what has been coming in and what has been going out over the last year, it would be a good idea to make a start now.” Mr Siddiq went on to say that landlords need to be aware that there are certain things that they can deduct from their rental income, so by keeping all your documentation in order you could end up saving yourself money.
For example, you are allowed to deduct the interest payments on your property’s mortgages, as well as other additional costs such as the cost of phone calls, landlord insurance, and travel costs to the property for inspections. Mr Siddiq went on to say: “There are important steps landlords can take as we enter the new financial year to ensure that next year’s tax return is an easier process. If you really want to make life easier, ensuring good record keeping is key. Keep all receipts not matter how small, they all add up. Most importantly, set up a separate bank account so you can track what is going in and what is going out via your bank statements.”
Keeping on top of all your credits and debits may sound difficult at first, but if you set up a system you will soon find that it comes naturally. In the long-term, keeping all your financial documents organised and safe could also save you time and money, and will ensure that you don’t end up being charged by the HMRC for not paying the correct amount in tax.