![\"Are](\"https:\/\/blog.idealflatmate.co.uk\/landlord-hq\/wp-content\/uploads\/sites\/3\/2018\/11\/rawpixel-780494-unsplash.jpg\"){kind=tracking}
<\/p>\nRecent years have seen the rise of the \u2018accidental landlord\u2019 – that is, individuals who didn\u2019t make a conscious decision to enter the sector, but who have become landlords through circumstance. Many fall into the business accidentally, renting out their home after having to suddenly move or even taking care of a relative\u2019s property. Many more landlords have a career outside of letting and are already paying tax through their monthly pay cheques.<\/p>\n
So it might not feel that renting your home makes you self employed. Unfortunately, that\u2019s not how HMRC see things. So what do you need to know to keep yourself in the taxman\u2019s good books?<\/p>\n
<\/p>\n
First, you must register as self-employed with HMRC. Then, you will be obliged to complete an annual Self Assessment tax return, and pay any tax due by the relevant deadline. For most taxpayers, 31 January is the deadline for filing and paying taxes due from the previous tax year. In addition, you may have to pay a \u2018payment on account\u2019, consisting of 50 per cent of the tax due. This is split into two payments, one on the 31 January and one on the following 31 July. These payments are offset against your next year\u2019s tax bill.<\/p>\n
There are financial penalties for late filing and late payment, and these become more severe the later you are. It\u2019s very important that you file and pay your tax on time.<\/p>\n
Your income tax and National Insurance Contributions bills will depend on the amount that you\u2019ve earned, and the tax bracket you fall into. Remember that any earnings from your other job will also be taken into account here.<\/p>\n
In addition, if you have bought or sold a property during the tax year in question, you may have to pay Stamp Duty Land Tax (SDLT) and Capital Gains Tax. Look out for further articles on both these subjects from ideal flatmate soon.<\/p>\n
The good news is that there are some tax allowances for landlords in the UK. The government grants landlords a tax-free property allowance on the first \u00a31,000 of their income, which is useful for landlords with very small rental earnings. In addition, landlords can offset many of their expenses against tax – although it\u2019s important to understand that the rules in this area have recently changed. For more information, read our guide to what landlord expenses are tax deductible in the UK<\/a>.<\/p>\n As we\u2019ve seen, many landlords in the UK let out properties alongside a conventional job. During Self Assessment you will have the opportunity to declare income from other sources that you have already paid tax on, such as PAYE earnings from an employer. It\u2019s important that you complete the form carefully and accurately, and remember that you should keep your payslips.<\/p>\n If you are new to self-employment, or even if you\u2019re a seasoned pro, you might consider engaging an accountant to guide you through the process. They\u2019ll be able to take the pain out of the Self Assessment process, but crucially they may also be able to save you some money by pointing out allowable expenses that you\u2019d missed.<\/p>\n You should make sure that you\u2019re setting aside money for your tax bill throughout the year in order to make sure you can pay the bill when it\u2019s due each January. However, self-employed people\u2019s incomes can fluctuate significantly, and sometimes you may be short.<\/p>\n In these cases, it\u2019s important that you contact HRMC immediately. You will be able to request a payment plan, allowing you to spread the bill over an agreed number of months. Whatever you do, don\u2019t ignore the problem – the penalties and interest will mount up, and your bill can very quickly increase several times over.<\/p>\n![\"\"](\"https:\/\/blog.idealflatmate.co.uk\/landlord-hq\/wp-content\/uploads\/sites\/3\/2018\/09\/blog-addlisting.jpg\")
<\/a><\/p>\nHow will being self employed affect any other employment?<\/h2>\n
What if I can\u2019t pay my tax bill?<\/h2>\n