Buy-to-Let landlords – the 2022 guide

We have a large number of buy-to-let landlords on our books at JW Hinks, and, as with all our clients, we pride ourselves on looking after their interests, keeping them informed about changes to their sector and helping them keep up with key deadlines. With that in mind, here’s a rundown of everything you need to know, as a buy-to-let landlord, going into 2022.

• Self-assessment tax deadline
  Landlords are considered self-employed for tax purposes, so should have submitted their 2020/21 tax return by 31^st However, recent announcements from HMRC (see here) mean that late filing penalties will not be charged if you missed that deadline. If you still have to submit your 2020/21 tax return, then time is of the essence. Get in touch with us and we’ll help you ensure you are not putting yourself at risk.
• Reduced finance cost relief
  The government has been restricting the amount of income tax relief available on residential property finance costs for the last five years. This means that higher-income landlords will be hit harder than they once were (the goal is to reduce relief to 20%, the basic rate of tax, from 2020/21 onwards). As a result, it may make more sense for you to operate your business as a limited company: corporation tax is just 19%, while personal income tax rates are 20%, 40% and 45%. If you want to explore this option, give us a call and we’ll walk you through everything you need to know.
• Updated capital gains tax deadline
  If you have sold a property in the UK, then you have to file a return with HMRC separately to your self-assessment tax return. However, due to recent changes, you can now report capital gain within 60 days instead of the previous 30-day window (see here).
• Making Tax Digital
  From April 2024, landlords will be expected to comply with the new “Making Tax Digital” regulations, assuming they own property with a rental income of £10,000 or more. You can learn more about Making Tax Digital here. You still have plenty of time to prepare – but we would urge you to take the initiative rather than wait until the last minute.
• Updates to corporation tax
  From April 2023, corporation tax rates are rising for some companies. If your taxable profits are below the lower profit limit of £50,000 then corporation tax will remain at 19%. However, if your taxable profits are higher than upper profit limit of £250,000, then your corporation tax will rise to 25%. For companies with taxable profits falling between £50,000 and £250,000 marginal relief will be available to reduce the amount of profits subject to the 25% charge. Please also be aware the lower and upper profit limits are reduced if there are any associated companies.

If you are a buy-to-let landlord and you want to discuss any of the above – or talk about your business more generally – then call JW Hinks on 0121 456 0190. Our team of experts will ensure you