Office of Tax Simplification – Landlords Survey

by Property118.com News Team

11:31 AM, 11th September 2019
About A year ago

Office of Tax Simplification – Landlords Survey

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Office of Tax Simplification – Landlords Survey

The government department Office of Tax Simplification (OTS) is seeking views on tax reporting and payment arrangements for self employed people and landlords of residential property owned in their personal names (not for company owned property) to inform its work. The consultation closes

the OTS published a document setting out the scope of a project looking at the practical tax reporting and payment arrangements for self employed people and landlords of residential property. The OTS has produced two short online surveys to gather information about people’s experience and views on the current system and potential areas of improvement. All responses will be anonymous

Have your say and complete the Survey for landlords click here.

The OTS would like to hear from anyone who receives residential property income, and submits an annual self assessment return (rather than those who hold property through a company).

The OTS is the independent adviser to government on tax simplification, challenging tax complexity to help all users of the tax system; it does not implement changes – these are a matter for government and for Parliament. The OTS works to improve the experience of all who interact with the tax system. It aims to reduce the administrative burden – which is what people encounter in practice – as well as simplifying the rules. Simplification of the technical and administrative aspects of tax are each important, both to taxpayers and HMRC.

Comments

Monty Bodkin

9:08 AM, 13th September 2019
About A year ago

Reply to the comment left by Old Mrs Landlord at 12/09/2019 - 17:24
The January payment is for income received in the current financial year, the July payment four months after the end of the financial year.
Landlords who don’t earn above the threshold pay their tax in arrears of up to 22 months.
Therefore this will affect amateur landlords more than established professional landlords;

https://www.gov.uk/understand-self-assessment-bill/payments-on-account

‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).

You have to make 2 payments on account every year unless:

your last Self Assessment tax bill was less than £1,000
you’ve already paid more than 80% of all the tax you owe

Monty Bodkin

9:12 AM, 13th September 2019
About A year ago

Not saying this is a good thing BTW, just pointing out the positives for those of us already making payments on account.

Old Mrs Landlord

12:38 PM, 13th September 2019
About A year ago

Reply to the comment left by Monty Bodkin at 13/09/2019 - 09:08
You are correct that at least some of the amount to be paid in January next will be in respect of the current tax year. However, it will be half of what HMRC estimate you will owe for the whole year (based on your previous year's liability). By January 31st, almost ten months of that year will have already passed so how can you say this payment is in advance? As you acknowledge, the July payment will be four months after the end of the tax year to which it relates, so some of it will be tax on income received the previous October, yet you insist you are paying tax in advance. I posted that, compared to someone on PAYE, landlords are paying tax in arrears and I do not feel you have shown that statement to be incorrect. I fully agree with your assertion that landlords in receipt of a smaller rental income, who do not currently have to make twice-yearly payments, will be the most disadvantaged by the introduction of MTD.

Monty Bodkin

13:10 PM, 13th September 2019
About A year ago

Reply to the comment left by Old Mrs Landlord at 13/09/2019 - 12:38”how can you say this payment is in advance?
..........
you insist you are paying tax in advance”

I didn’t say I paid in advance.
The quote is from HMRC in respect of “advance payment towards your tax bill”
I pay my tax partially as it occurs and the remainder 4 months after the end of the tax year. Hence it won’t be a big cash flow problem for me or other landlords already making payment on account if it becomes fully payable as it occurs.

Old Mrs Landlord

13:17 PM, 13th September 2019
About A year ago

Reply to the comment left by Monty Bodkin at 13/09/2019 - 13:10
Having checked back I can see that you did not say that you were paying tax in advance, only that you were not paying tax in arrears. On that we must agree to differ because I believe I have demonstrated that landlords are indeed paying tax in arrears.

Chris

19:56 PM, 14th September 2019
About A year ago

It would be very hard to record rental payments on a accounting package if the bank or estate agent had deducted some Tax.

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