Tax changes ahead

We are now in the second tax year of the changes to the tax relief for residential landlords, in relation to the tax deductibility of finance charges, such as mortgage interest.

However, many of you won’t have felt or seen the impact of such changes as you probably have not submitted your Tax Return for first year of the change i.e. 2017/18.

Whilst there has been a lot of press coverage around this matter, many landlords that we meet, are under the impression that this won’t impact upon them as they are not higher rate taxpayers. However, the changes announced may ultimately mean that you become a higher rate taxpayer by ‘accident’. 

For more information, we suggest that you read the following article (including an example) from accountants Clive Owen LLP:

https://www.cliveowen.com/2018/05/avoid-the-increases-in-tax-bills/

Making Tax Digital (MTD)

At the moment, HMRC are focussing on MTD for VAT registered businesses. This means that businesses will have to submit VAT returns on a quarterly basis directly from approved accounting software rather than via the HMRC portal.

From 2020, many landlords will have to submit details of their rental income and expenditure to HMRC on a quarterly basis directly from approved accounting software rather than via an annual Tax Return, so you will need to consider adopting compliant software shortly.

If you need assistance with MTD, then again Clive Owen LLP will be able to assist.

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