Landlords paying self assessment tax this month may have higher than expected bills, an accountancy firm claims.
Lee Murphy, managing director of The Accountancy Partnership, says surprisingly big bills may be down to HMRC scheduling.
“Slow down for ten minutes and understand what the payment actually includes” he advises.
He offers possible explanations to landlords facing unexpected bills.
More than one payment landing at once
“People often think they’re paying for one year, but January can include more than that — you could be paying what you owe for this tax return, and an upfront payment towards your next bill. That’s why the total can look higher than expected.”
Your income increased — and that changes the calculation
“If you’ve had a stronger year than last year, your tax will naturally be higher and it can also affect what you’re asked to pay going forward.”
Allowances didn’t apply as you expected
“Small changes can have a bigger impact than people realise. It’s worth double-checking your personal allowance position and whether anything has reduced it.”
Allowable expenses or reliefs were missed
“This is really common when people are rushing. If your records weren’t complete, you may have missed legitimate expenses and that can inflate the bill.”
Extra income was overlooked
“Side work, interest, dividends — it’s easy to forget smaller income streams until it’s time to add them to your tax return. Missing them can throw off the total and lead to surprises.”
Things weren’t reported correctly
“Double-check that the information reported to HMRC by your employer (or contractor if you’re paying CIS tax) is accurate, and reflects what you have on your payslips – and what arrived into your bank account!”
HMRC has offered guidance for landlords filing self assessment returns.
This article is taken from Landlord Today