I’ve been hearing that I should file my tax return four times a year... I'm used to just bundling up my receipts, bills and bank statements and trying to wade through them once a year - is this going to change, do I have to start getting organised?
Not yet – don’t panic (although maybe you should consider a little more day-to-day prep for your annual return!)
With the tax changes fresh in everyone’s minds, you're not the only landlord who's casting a dubious sideways glance at the bulging folders of receipts and bank statements lurking on the corner of desks and on top of filing cabinets.
However, the news that HMRC may now expect you to tackle this looming pile and file your records every three months has shed new light on this annual job. Depending on the size of your turnover depends on whether or not you will have to gear up for tackling your receipt mountain more regularly, although you can at least breathe a sign of relief until next April. This controversial scheme is being phased in gradually:
- April 2017: Pilot scheme launches
- April 2018: Income Tax for businesses, self-employed people and landlords with annual turnover above the VAT threshold (£85,000)
- April 2019/20: All businesses, self-employed people and landlords with annual turnover above £10,000
- April 2020: Corporation tax payers
This might all sound like more work, but don’t panic - this shouldn’t necessarily be looked upon as a negative step. Although initially it might take a little getting used to, by filing your returns more regularly your tax calculations will be able to be worked out based on more ‘real-time’ information, so you are less likely to be stung with a tax bill based on ‘ifs and buts’. With the recent changes to mortgage interest relief throwing many people’s usual calculations out of the window, it may even be a relief to have a more regular update on your tax liability, rather than being surprised by an unexpected bill come January!
Also, don’t forget if your turnover is less than £10k, you can relax – consultations have exempted all those with an annual turnover of less that £10,000 from digital record keeping and quarterly updates, although you can still choose to enrol if you want to.
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