January 31st tax return deadline nearing

The self-assessment tax retun can be very complicated for buy-to-let investor, if they are making the most of all the tax reliefs available to them.

Getting ahead of the looming January 31st deadline over the quiet Christmas period can be a good option, especially for new investors with less experience of declaring their buy-to-let income.

Stephen Ludlow, Chairman of ludlowthompson, comments: “By completing the tax return early, buy-to-let landlords will have more time to make sure they have applied for the relevant tax reliefs and allowances that are available.

“Investing in buy-to-let properties is very attractive in the UK. The costs that can be set against tax make it even more attractive. It would be a pity to miss out on the reliefs that are available because there wasn't enough time to complete the tax return carefully."

Tax tips for buy-to-let landlords

• Make sure you claim mortgage interest against your tax bill – the higher the mortgage taken out on a buy-to-let property, the higher the relief available.
• Claim tax relief on 10% of your rental income every year to cover depreciation in the value of furnishings (but not fittings such as kitchens or bathrooms).
• It is important to consider in whose name buy-to-let properties are held. Owning the property in the name of a spouse without a regular income means a couple can take advantage of previously unused personal income tax allowances.
• There are also other costs which can be claimed, such as electricity and gas safety checks inspections, letting agents’ fees, maintenance and repairs to your property, phone calls, stationery and accountants' fees.

Stephen Ludlow adds: "It is now particularly important to keep within the deadline because HMRC is taking an increasingly aggressive approach to taxpayers who file their tax return late."

Buy-to-let investors unsure about their tax bill should speak to their accountant or with HMRC directly on 0845 601 8819.