Help needed for first tax return on rented property

miss_jane_3

Hello, I'm new to these boards, I need some advice and I'm hoping someone here can help me.

I have a flat that I rented out for a year from Nov 07 to Nov 08.

I was going to fill in a self assessment form for the year 07/08 (covering Nov 2007 to March 2008) and got to the bit that said I needed a Unique Taxpayer's Reference number (UTR). So I phoned up today to get one, and, after much to'ing and fro'ing, I got told that as I have not previously registered as self employed, I have to do my tax return on paper.

I was told to give all my details and the details of the property, rent, expenses, etc and send them to my local tax office and they will send me a bill.

I am panicking now that I'm not going to get this done in time (before 31st Jan) and that I'll get fined.

Does this seem right? I really thought I would be able to do it online but it doesn't look like I can?

Sorry if I seem totally clueless, its the first time I've had to do anything like this!

fengirl_2

Yes, in order to file online you need a UTR. It is obviously too late to get one, so you will need to do a paper return. Are HMRC sending you one?
You can start by calculating the profit on your lettings and working out the tax due. Then, if the paper return does not come in time, you can pay the tax due to prevent interest arising.

ceeforcat

Just to add, if you are able to calculate your lettings profit attributable to the period from November 2007 to 5th April 2008 and the tax due, payment of this amount by 31st January will reduce the penalty for late filing to zero. Your problem is that you do not have a UTR account to set this against. In this case, I would strongly advise that you hand deliver your paper return, with or without a UTR together with a cheque to your local office. Ensure that you receive a receipt for both the return and the cheque.

Oh, how I will miss the annual midnight trip to HMRC this year now that paper filing is no more.

Pennywise

I think HMRC have told you a load of rubbish to be honest.

Firstly, you don't need to register as being self employed - property letting income isn't self employment. Yes, you should have told them about a new source of untaxed income to trigger the issue of a tax return, but that is different. Whatever you do, don't register as self employed as that would complicate things even further.

Secondly, I can' see why you don't have time to get a UTR and file a tax return online. The deadline is three weeks away - there is a chance that you could still file.

If I were you, I'd phone again and hopefully this time you'll speak to someone who knows more about it. They can issue a UTR fairly quickly and once you have that, you can apply online to get your user IDs and passwords for online filing. Time isn't on your side, but I wouldn't give up just yet.

Have a paper return ready as a contingency to hand deliver to your local tax office. The paper return should have been submitted by end of October, so you'll probably have a late filing penalty to pay anyway, but if you get the paper form to them by end of January, you may be lucky and get an appeal accepted against any late filing penalty they issue.

trevormax

Pennywise wrote: »

I think HMRC have told you a load of rubbish to be honest.

Firstly, you don't need to register as being self employed - property letting income isn't self employment. Yes, you should have told them about a new source of untaxed income to trigger the issue of a tax return, but that is different. Whatever you do, don't register as self employed as that would complicate things even further.

Secondly, I can' see why you don't have time to get a UTR and file a tax return online. The deadline is three weeks away - there is a chance that you could still file.

If I were you, I'd phone again and hopefully this time you'll speak to someone who knows more about it. They can issue a UTR fairly quickly and once you have that, you can apply online to get your user IDs and passwords for online filing. Time isn't on your side, but I wouldn't give up just yet.

Have a paper return ready as a contingency to hand deliver to your local tax office. The paper return should have been submitted by end of October, so you'll probably have a late filing penalty to pay anyway, but if you get the paper form to them by end of January, you may be lucky and get an appeal accepted against any late filing penalty they issue.

Getting a UTR to file online doesn't mean being registered as self employed. In fact if he was trying to register as self employed, it would make things easier due to HMRC's new fast track phone line for newly self employed people which has a turnaround as low as 7 days. Getting a UTR is vital to file an online tax return. Without it it just wont work.

I have been attempting to get UTR's for clients where I work and have been told countless times that they will not accept requests for a UTR over the phone. A letter needs to be sent to your tax office to request one. There is next to no chance this would happen oin time though as this letter goes into their general post pile and some offices are only now dealing with letters sent to them in November.

As others have said, he should calculate his tax liability and pay this when taking his paper return in. This will reduce any penalty to nil and the OP has a very good reason for not being able to file online so a paper copy will likely be accepted without any hassle.

Kynthia

I'm in a similar position. I started renting out a property in Oct 07. I looked up my tax office on the HMRC website (Tax Offices for Individual tax) and rang them last week. I told them when I had started renting out the property, they put me on the system and gave me my number while I waited on the phone. It couldn't have been easier. :j

All I have to do now is ring the online tax return number she gave me to get a PIN which will allow me to complete my online tax return. Hopefully I'll manage this before 31st Jan so I won't get fined.

If I were you I'd give them another call. If you need info on what your allowable expenses are www.direct.gov.uk is a good site, just search for 'rental income'.

Good luck

Lets_Say_2

Regarding this UTR - if someone has been self employed for years and normally files a paper return, but this year has missed the paper deadline, will he need a UTR to be able to file online? If for whatever reason, he misses the 31/1 deadline, and gets the penalty, would illness -depression - normally get the penalty rescinded on appeal?

lolarentt

As a rough guide you can deduct from gross rental income: letting costs (agent fees etc), interest charges on any mortgage, 10% depreciation, and maintainance costs. The remaining 'profit' you will need to pay tax on at your usual rate (assuming it doesn't take you into a new higher tax band). If the worst comes to the worst and you've not sorted out the paperwork, just send your tax office a cheque for your estimate of the tax due by 31 January and they should be happy with that for the time being, while you get things properly organised.

BoGoF

Lets_Say wrote: »

Regarding this UTR - if someone has been self employed for years and normally files a paper return, but this year has missed the paper deadline, will he need a UTR to be able to file online? If for whatever reason, he misses the 31/1 deadline, and gets the penalty, would illness -depression - normally get the penalty rescinded on appeal?

If you have been self employed for years and filed any type of return before you already have a UTR - it's the 10 digit number on the front of your Tax Return. If you haven't sent a paper return by 31 October your only option is to now file online.

chriiiiiiiis

Download a tax return from the HMRC site, complete it and ACCURATELY calculate the tax you owe. Hand it in to your local office with a cheque clearly attached to the return BEFORE 31 JANUARY.

Lets_Say_2

Thanks BoGoF, I just wasn't sure if an online UTR was something different to a normal reference number.