SA Tax Deadline Here Again
OMG! It’s here again. The ‘bloomin’ personal assessment tax deadline looms large. Having been away for 10 days in the Algarve I am facing an uphill struggle! For web filing the ‘final’ deadline is the 31st January, to avoid a financial penalty.
I wouldn’t advise landlords to leave it right to the wire just in case the system crashes under the strain. This happened to me several years ago and the revenue did give me special dispensation and very graciously refunded me the £100 fine.
Tax returns in a stable environment
Since interest rates dropped to the floor back in 2008 my mortgage payments have remained pretty constant apart from the odd expiry of a fixed rate product. In addition, I’ve been fully let now for several years, which means my rental income has remained constant too.
I’ve given lots of general tax advice to landlords in the past and given that not much has changed then this remains current.
So, this year I thought I’d concentrate on outlining how landlords can use our free property management software to prepare and calculate their liabilities under the UK Property section of their tax return.
1. Make sure all the properties and tenancies that existed in the tax year (2012-13) are inputted. This will enable the system to generate the rent requests for each tenancy.
2. Update all rental payments. The easiest way to do this is via the Summary screen, click on the Rents button in the left hand toolbar. That will take you to a screen with all the outstanding rents for the portfolio. The Tick Receipt button offers a quick solution, but if a more detailed record of rental payments is required use the Full Edit function.
3. Having updated all the rental payments for the tax year the next stage is to add in Expenses. Via the Summary screen, click on the Expenses button in the left hand tool bar.
4. To add expenses go to the top of the screen and click on the ‘Add Multiple’ text link at the top of the screen. REMEMBER the Revenue looks at your letting business as a whole so don’t worry to much about apportioning each cost to an individual property or which category the expense falls under. The important thing is to account for all your allowable expenses.
5. If you have any loans associated with your letting business (most of us do) then you will need to account for them. REMEMBER it is only the interest payments that are allowable. To add in the Mortgage Interest you need to go via the Summary screen, click on the Investment button and then click the ‘Interest button’. This will allow you to add your loan interest for each property.
Once updated, all of this data will show in your ‘Tax Summary’.
6. To view the Tax Summary, go via the Summary screen, click on the Tax button. It will show you all the expenses and rental income. It is possible to view your data under the cash or accruals approach. The latter is the Revenues preferred method for accounting, which accounts for payments and revenue when they fall due – not when they are paid. The cash accounting approach is accepted by the Revenue for small landlords where the rental income is less than £15,000.
7. Having completed the Property Section of your Tax return you are now able to edit elements of the return by clicking the ‘Edit’ button at the top of the screen.
Once you are happy with the figures you can either choose to input the data into your tax return or where you are using a tax adviser then you can email the data straight to your accountant.
Have a look at this article – landlords saving tax or if you want to ask a specific question about our free property management software go to our landlord forum and sign up, once approved, post your questions.
If you do need additional advice and information have a look at our Tax Bookshop for more in depth written advice.