Tax return season can be a daunting time for landlords, especially if you’re juggling multiple properties, or you haven’t kept records of your income and expenses as you’ve gone through the year. By staying organised and using the right tools, you can simplify the process, save time, and reduce tax return stress.
This guide will walk you through completing your tax return smoothly and how PaTMa can help you do this. We’ve also got some bonus tips to help you make next year’s tax return even easier.
Do Landlords Need to File a Tax Return?
We know this sounds like we’re teaching you to suck eggs, but for completeness, its worth a mention. If you earn rental income, you are usually required to file a Self Assessment tax return with HMRC. Here’s a quick breakdown of who needs to file:
- Landlords with Rental Income: If you earn over £1,000 annually from property, you must declare this to HMRC.
- Higher-Rate Taxpayers: Even if your rental income falls within your personal allowance, you may need to file if it pushes your total income above the threshold.
- Partnerships or Joint Ownership: If you share ownership of a property, each owner must declare their share of income and expenses.
If you’re not sure whether you need to file, you can use HMRC’s online tool or consult a tax advisor to confirm your obligations.
Important Deadlines for Tax Returns
Staying aware of deadlines can save you from costly penalties. Here are the key dates to remember:
- 5th October: Register for Self Assessment if you’re filing for the first time.
- 31st January: Deadline to file your online tax return and pay any tax owed for the previous year.
- 31st July: If applicable, make your second payment on account.
Missing these deadlines can result in fines and interest charges, which makes staying organised essential. (We’ll talk more about penalties in the next section.)
The Consequences of Missing the Tax Return and Payment Deadlines
HMRC imposes penalties to encourage timely submissions. Here’s what you could face:
- Late Filing Penalties:
- £100 for up to 3 months late.
- Additional daily fines after 3 months.
- Late Payment Penalties:
- 5% of the tax owed after 30 days, 6 months, and 12 months.
- Interest on Unpaid Tax:
- Added daily until payment is made.
Avoid these unnecessary costs by keeping your finances in order with tools like PaTMa. A little organisation now can save you hundreds (or even thousands) later.
Making Tax Digital (MTD) and Landlords
Making Tax Digital (MTD) is a government initiative to simplify tax processes and reduce errors through digital record-keeping. Here’s what landlords need to know:
- Who Must Comply?
- Starting April 2026: Landlords with annual rental income over £50,000.
- Starting April 2027: Threshold reduces to £30,000.
- What Changes?
- Quarterly submissions of income and expenses via MTD-compatible software.
- Annual tax returns remain for other income and adjustments.
PaTMa is already MTD-compliant, making it a seamless choice for landlords preparing for the transition. By digitising your records now, you’ll avoid last-minute scrambles when the deadlines roll around.
Preparing Your Tax Return with PaTMa
Here’s how PaTMa simplifies the process of preparing your tax return:
- Enter Income and Expenses: Log all your property-related income and costs throughout the year.
- Generate Reports: Use PaTMa’s Tax Return Report to get a clear summary of your figures, ready to input into HMRC’s Self Assessment form.
- Submit with Confidence: Whether you’re doing it yourself or sharing the report with your accountant, PaTMa ensures everything is accurate and organised.
💡 Watch Simon’s Walkthrough: For a detailed explanation of preparing your property tax return, check out Simon’s latest video on this topic on the Business of Property Podcast.
Planning Ahead: Simplify Next Year’s Tax Season
If this year’s tax return wasn’t easy or took you more than a couple of hours, these tips can help to reduce the amount of time it takes to complete and submit your next one. By making a few changes now, you can benefit from easier financial planning, lightning fast tax returns, and other benefits that come from being more prepared - like paying your tax bill over a number of months rather than all in one go.
- Start Using PaTMa Today: PaTMa keeps your records organised throughout the year, so you’re always ready when tax time rolls around. When your tax return is due, you can pull a simple report that collates everything nicely for your tax return.
- Adopt a Monthly Financial Routine: Dedicate time each month to update your income and expense records. Simon, PaTMa’s founder and landlord for 20 years, shares his simple monthly bookkeeping routine in this video. It’s a great example of how easy it can be to stay on top of your finances.
- Budget for Tax Payments:
- Save a percentage of your rental income each month in a dedicated savings account.
- Bonus: Earn interest on your tax savings while building up your HMRC payment fund.
Tips for Maximising Tax Efficiency
A little planning can help you minimise your tax bill while staying compliant. Here are some top tips:
Claim Allowable Expenses:
Ensuring you don’t miss any allowable expenses reduces your tax bill overall. Common deductions for landlords include: repairs, utilities, letting agent fees, advertising costs etc. Familiarise yourself with these deductions so you can keep track of them and ensure they’re covered in your tax return. Using software like PaTMa means you can track your expenses and store receipts as you go along, minimising the risk of forgetting everything. Since PaTMa also uses expense categories all your expenses will be categorised and you won’t have to cagegorise them last minute when you’re submitting your return.
Keep Accurate Records:
Good record-keeping is essential to justify claims if HMRC requests evidence. It’s also being made mandatory under MTD. Keeping receipts and invoices tidy can be a challenge, but using a tool like PaTMa means you can take advantage of digital storage that’s designed specifically to keep your receipts, invoices and rental documents tidy and organised.
Plan Ahead for Tax Relief:
Consider how future tax changes, like MTD, might impact your tax return strategy and financial planning. Use PaTMa’s forecasting tools to project your tax liabilities and adjust your savings accordingly.
Why PaTMa is the Best Tool for Helping Landlords With Tax Returns
PaTMa was created by landlords for landlords, with simplicity and practicality at its heart. PaTMa is a standout software for helping you to stay organised and compliant across the whole spectrum of property management, from tenant onboarding to tax return. Here are just some of our favourite things about PaTMa:
- Intuitive and User-Friendly: No need for accounting expertise or double entry bookkeeping, just log income and expenses, and PaTMa does the rest.
- Tailored Tax Reports: Generate reports designed specifically for HMRC’s Self Assessment forms.
- Making Tax Digital Ready: Stay ahead of the curve, when MTD arrives you’ll automatically be ready if you’re using PaTMa.
- Affordable Pricing: Manage your first property for free, with scalable plans for growing portfolios.
By integrating PaTMa into your landlord toolkit, you’ll save time, reduce errors, and gain peace of mind come tax season.
Tax returns don’t have to be overwhelming. With PaTMa, you’ll have the tools you need to stay organised, compliant, and stress-free. By preparing early, adopting a monthly routine, and leveraging digital tools, you can make tax season a minor task rather than a major headache.
💡 Ready to simplify your tax returns? Start your free trial with PaTMa today.
