British Expat Money Partner with GoSimpleTax to provide a simple solution for your Tax Return – Complete your Self Assessment tax return in four easy steps as an expat.
You probably hate having to do your tax return each year. Let’s be honest, who does enjoy it? If you’re a UK landlord and would like to make completing your Self Assessment tax return easier, then follow our four simple steps…
Step #1 – The Non-Resident Landlord Scheme
People from the UK who live abroad for six or more months a year and rent out UK property may be considered “non-resident landlords” by HMRC, regardless of whether they’re a UK resident or not for tax purposes. Introduced to ensure that UK Income Tax is paid on UK rental income, the Non-Resident Landlord Scheme (NRLS) requires landlords, tenants and letting agents to obey strict rules if they’re to avoid being fined.
Under the NRLS, the tenant or letting agent is legally obliged each month to deduct any tax due before the landlord living overseas is paid any rent. All of this deducted tax must be paid in full to HMRC every three months.
When the ex-pat landlord completes their UK Self Assessment tax return, the tax their tenant or letting agent has paid to HMRC can be claimed as a deduction against the landlord’s UK tax liability. Non-resident landlords can apply to have rent paid to them directly in full, so that they can pay the tax themselves via their Self Assessment tax return. To do this, you apply by filling in form NRL1, which you then send to HMRC.
Step #2 – Use Self Assessment tax return filing software
Using third party software – like GoSimpleTax – will help make filing your Self Assessment tax return much quicker and easier. After choosing the software it will direct you to filling out sections of the tax return that are relevant to you, in this case filing out your SA105. If you make any mistakes and warnings will come up, and you might save money by finding out what tax allowances and reliefs you can claim.
Self Assessment tax return software costs a lot less than paying an accountant do your Self Assessment tax return for you. The time software can save you makes the small investment valuable.
Step #3 – Report all of your taxable income
In order for HMRC to work out how much tax you owe, you must report all sources of taxable income within your tax return. That includes income from employment, which is something that some landlords completing Self Assessment tax returns for the first time can miss out.
Taxable income can come from self-employment, savings interest, share dividend payments, capital gains from selling assets, state or private pension payments and even some state benefits. If your income from such sources is relatively low, even after modest rental income is added, there might be no tax to pay once your tax allowances and reliefs are taken into account.
Step #4 – Claim all your tax expenses
Renting out property usually involves having to pay many costs. Luckily, to help reduce your tax bill, there are lots of “allowable expenses” that can be claimed against your gross rental income. These include property maintenance, repair and redecorating costs, gardening and cleaning, insurance, service charges, lettings agent and management fees to name a few. You detail your rental allowable expenses within your supplementary SA105 form.
If your rental property is furnished or part-furnished, you may be able to claim Replacement Domestic Items relief for replacing sofas, beds, carpets, curtains, white goods, sofas, crockery, cutlery, etc.
Our top tips for completing your Self Assessment tax return
Don’t leave completing your Self Assessment tax return until the last minute. Who needs the stress? Don’t leave it until the online filing deadline (midnight on 31 January) which is only a few days away.
Take your time when filling out your Self Assessment tax return. It can take as little as 30 minutes, if you have all of the necessary information to hand. Also pick a place where you’ll be free from distractions, so you can concentrate fully on the job in hand, get it done and off your plate.
Here at GoSimpleTax we can help you file your SA105 Self Assessment tax return directly to HMRC. Sign up for your free trial today.
“Saved myself £100 over using an accountant. First time I’ve used this tax return service, took me 30mins from sign up to filing with HMRC – super quick!” – Pete via Trustpilot
