Landlords

If you’re a company director, you’ll likely need to complete a Self Assessment tax return each year. But what exactly does that mean, why do you need to do it, and how can you make sure you get it right? In this guide, we’ll walk you through everything you need to know about Self Assessment for directors - including deadlines, what to include, and how to avoid common mistakes. Do Company Directors Need to File a Self Assessment Tax Return? In most cases, yes. HMRC requires a Self Assessment tax return if you receive income that hasn’t already been taxed at source. As a company director, you’re usually paid in a combination of: A salary through PAYE, and Dividends from company profits. Even if you take a small salary below the tax threshold, your dividends could still make you liable for income tax so HMRC expects a return to be filed. You must file a tax return if: You’re a company director and you receive dividends or other income outside of PAYE. You earn more than £10,000 in dividends during the tax year. You have untaxed income such as rental income, investments, or freelance work. When Is the Self Assessment Deadline for Directors? The deadlines are the same for everyone who files a Self Assessment: 5 October: Register for Self Assessment (if you haven’t filed before). 31 October: Deadline for paper returns (rarely used now). 31 January: Deadline for online filing and for paying any tax owed. The tax year runs from 6 April to 5 April, so your 2024/25 tax return will be due by 31 January 2026. Missing the deadline can lead to penalties, even if you don’t owe any tax, so it’s best not to leave it to the last minute. What Should Directors Include in Their Tax Return? You’ll need to declare all your income for the year, including: Salary paid via PAYE Dividends from your company Interest from savings or investments Rental income (if applicable) Any other untaxed income You can also claim personal allowable expenses and reliefs, such as: Charitable donations under Gift Aid Pension contributions Certain professional fees or subscriptions Your company accounts will already cover business income and expenses, but your Self Assessment focuses on your personal income and tax liabilities. How Much Tax Will I Pay as a Director? The tax rates and thresholds are the same for everyone. You'll pay: Income Tax on your salary and dividends, and National Insurance on your salary (if above the threshold). Your salary will be taxed via PAYE, but dividends and other income are taxed through your Self Assessment. What Happens If You Don’t File? HMRC can issue penalties for late filing, even if you don't owe any tax. There are also late payment penalties and interest charges if you pay your tax late. How an Accountant Can Help Completing your Self Assessment can feel daunting, especially if you’re juggling payroll, VAT, and company accounts too. At CJL Accountancy, we help directors file accurately and on time, ensuring: ✅ All income and dividends are correctly reported ✅ You don’t overpay tax ✅ You meet every deadline stress-free We also offer proactive tax planning to help you structure your income in the most tax-efficient way for the future. Common Questions About Self Assessment for Directors Q: Do all directors need to file a tax return? A: No. If you only received salary and benefits then that will be taxed through PAYE, but anything else will likely need a tax return. Q: Can HMRC automatically collect my tax through PAYE? A: Only for your salary - dividends and other income must go through Self Assessment. Q: When should I register? A: By 5 October following the end of the tax year when you became a director or started receiving dividends. But if you've missed that for 2024/25, register as soon as possible. Q: What if my accountant files on my behalf? A: You’re still legally responsible for ensuring it’s correct and submitted on time, but a qualified accountant makes the process much smoother. Need Help Filing Your Director’s Tax Return? At CJL Accountancy, we specialise in helping limited company directors with Self Assessment, dividends, and year-end planning. We’ll handle the figures so you can focus on running your business. 📩 Get in touch today

Running your own limited company gives you flexibility in how you pay yourself, but with that freedom comes responsibility. Two of the most common ways directors take money out of their companies are through a director’s loan account (DLA) and dividends. While both can seem similar on the surface - money leaving the company - there are big differences in how they work, and getting it wrong can cost you dearly. In this blog, we’ll break down what DLAs and dividends are, the risks of mixing them up, and how to avoid common pitfalls like overdrawn accounts and unexpected tax charges. What is a Director’s Loan Account (DLA)? A director’s loan account is simply a record of money that moves between you (the director) and your company, outside of salary and dividends. For example: You lend the company £5,000 to cover cash flow - this goes into your DLA as a credit. You take £2,000 out of the company for personal use, not as salary or dividends - this goes into your DLA as a debit. At any time, your DLA shows whether the company owes you money (in credit) or you owe the company money (overdrawn). What are Dividends? Dividends are payments made to shareholders out of company profits after tax. Unlike loans, they don’t need to be repaid. However, dividends can only legally be paid if the company has enough retained profits. For example: If your company made £30,000 profit last year (after Corporation Tax), you can vote to distribute part of that profit as dividends. If the company has no retained profit, dividends cannot be paid - even if there’s cash in the bank. Problems When Taking Money the Wrong Way Here’s where things often go wrong. Many directors treat the company bank account like their own and withdraw cash when they need it, or pay for personal expenditure via the company bank account. But if those withdrawals aren’t properly declared as dividends or salary, they’ll sit in the DLA instead. That’s not necessarily a problem - unless your DLA becomes overdrawn. Overdrawn DLAs and the Dreaded S455 Tax Charge An overdrawn DLA means you owe money to your company. HMRC doesn’t like this, because in effect you’ve borrowed money from your company without paying tax on it. If your DLA is still overdrawn nine months after your company’s year-end, the company has to pay a special tax charge called Section 455 (S455) tax - currently 33.75% of the outstanding balance. For example: You withdraw £10,000 from the company in July. The company year-end is 31 December. If that £10,000 hasn’t been repaid by the following 30 September, the company owes £3,375 in S455 tax. The good news? If you repay the loan later, the S455 tax can eventually be reclaimed - but only after a long delay, which can seriously affect cash flow. The Benefit in Kind for Loans Over £10,000 If your director’s loan exceeds £10,000 at any point in the tax year, HMRC treats it as a benefit in kind - because you’ve effectively received an interest-free (or low-interest) loan from your company. That means: You’ll pay income tax on the notional interest you “should” have paid. The company must also pay Class 1A National Insurance on the benefit. The charge is calculated using HMRC’s official interest rate. To avoid this, you can either repay the loan quickly or pay the company interest at least equal to the official rate. How to Avoid DLA Problems The key is good bookkeeping and forward planning. Here are our top tips: ✅ Plan your salary and dividends in advance so you know what you can take. ✅ Check profits before declaring dividends - never rely just on bank balance. ✅ Keep your DLA under control by recording every transaction accurately. ✅ Repay loans quickly if you do take money out temporarily. ✅ Work with an accountant who can guide you on the most tax-efficient way to withdraw money. Why This Matters Mixing up DLAs and dividends can lead to: Unexpected personal and company tax bills. Cash flow headaches for your business. By understanding the difference and planning ahead, you can take money out of your company with confidence - and avoid nasty surprises. Need Help With Your Director’s Loan Account? At CJL Accountancy, we work with limited company owners every day to make sure they’re paying themselves in the most tax-efficient way. Whether you’re worried about an overdrawn DLA, unsure if you can declare dividends, or want to avoid the S455 tax trap, we can help. 📞 Get in touch today for clear, friendly advice tailored to your business.

Whether you own one rental property or a portfolio, understanding how to complete your tax return as a landlord can save you money, stress, and potential penalties. In this guide, we’ll cover what landlords need to include on a tax return, key deadlines, allowable expenses, and how to make the process easier. Who Needs to Complete a Tax Return as a Landlord? You need to complete a Self Assessment tax return if you earn income from property. That includes: Renting out a residential or commercial property in the UK. Letting out a room in your own home (see Rent-A-Room below). Earning income from overseas property. Holiday lets, including Airbnb properties. When Do Landlords Need to File a Tax Return? The key tax return deadlines for landlords are: 5 October - register for Self Assessment if this is your first year as a landlord (don't panic if you've missed it this year, just register as soon as you can). 31 October - paper tax return filing deadline (rarely used). 31 January - online tax return and payment deadline for the previous tax year. For example, for the 2024/25 tax year (ending 5 April 2025), your tax return and any tax owed must be submitted by 31 January 2026. Missing these deadlines can result in automatic penalties and interest, even if you owe no tax. What Income Do You Need to Declare? You’ll need to declare all rental income, including: Monthly rent payments. Any non-refundable deposits kept. Income from additional services (e.g. cleaning or parking). HMRC expects full disclosure, so it’s important to maintain accurate records of all property income and related costs throughout the year. What Expenses Can Landlords Claim? Claiming allowable expenses reduces your taxable profit - and therefore your tax bill. Common allowable expenses include: Letting agent fees Accountancy fees Repairs and maintenance (not improvements) Insurance Council tax, utilities, and service charges (if paid by you) Advertising and tenant reference checks You can also claim a 20% tax relief on mortgage interest paid. Make sure you keep receipts and records for at least six years in case HMRC asks for evidence. Details of improvements made should be kept for the future as it may be able to claimed when you sell the property. Rent-A-Room If you rent a room in your house where the tenants share facilities with you, you may be able to claim rent-a-room relief. For 2024/25 it's up to £7,500 of gross rental income, or £3,750 each if the income is joint. Any income in excess of this is taxable. Making Tax Digital (MTD) for Landlords Making Tax Digital for Income Tax is due to affect landlords from April 2026. If your gross rental income exceeds £50,000, you’ll need to: Keep digital records of property income and expenses. Submit quarterly updates to HMRC. File a final year-end declaration digitally. Landlords earning between £30,000-£50,000 will follow in April 2027, and £20,000-£30,000 in April 2028. Getting used to digital record-keeping now will make the transition much smoother. Can HMRC Find Out If You Don’t Declare Rental Income? Yes - and increasingly easily. HMRC use data from letting agents, Airbnb, the Land Registry, mortgage providers, and even online platforms to identify landlords who haven’t declared rental income. HMRC can go back several years, charge penalties and interest, and in some cases issue higher fines for deliberate non-disclosure. However, if you come forward voluntarily before HMRC contacts you, you’ll usually receive lower penalties and can settle the tax owed under more favourable terms. If you’re unsure whether you’ve declared everything correctly, it’s always best to get professional advice before HMRC does. Don't forget to double check who owns the property (there are often cases where one person in a couple has declared all income even though it's jointly owned). People also often mistakenly think they don't need to declare because their mortgage payment means they have no profit, but as it's only a 20% tax relief on the interest, not the whole repayment, there can be a taxable profit. How to Make Your Landlord Tax Return Easier Completing your own tax return can be time-consuming and confusing - especially with changing tax rules. Here are a few ways to simplify the process: Track income and expenses monthly instead of leaving it until the end of the year. Use accounting software that’s MTD-compatible. Get professional help - an accountant can identify allowable expenses, ensure accuracy, and help you plan ahead for tax changes. Need Help with Your Landlord Tax Return? At CJL Accountancy, we make tax simple. Whether you’re a first-time landlord or managing multiple properties, we’ll handle your Self Assessment, bookkeeping, and tax planning - ensuring you stay compliant and never pay more tax than you should. 📞 Get in touch to find out how we can help make your landlord accounting stress-free.

At CJL Accountancy, we regularly meet directors who aren’t fully aware of their wider duties. Understanding these responsibilities isn’t just about avoiding penalties, it’s about protecting your business, your reputation, and even your personal finances. Here’s what you legally need to do as a company director, and some common pitfalls to avoid. 1. Keep and Maintain Proper Company Records By law, directors must make sure the company keeps accurate and up-to-date records. This includes: Accounting records – income, expenses, assets, liabilities, and supporting documents. Statutory registers – shareholders, directors, PSCs (people with significant control). Minutes of meetings and decisions – especially for major business decisions. ⚠️ Poor record-keeping makes it harder to spot financial risks and could trigger penalties. For example, if records aren’t kept for at least six years, the company could face fines or legal action. 2. Act in the Company’s Best Interests Directors have a legal duty to put the company’s success first. This means: Acting in good faith and making fair decisions. Avoiding conflicts of interest (e.g. putting personal benefit ahead of the company). Considering the impact of decisions on employees, creditors, and shareholders. ⚠️ Treating the company bank account like your own can cause issues with paying HMRC, employees or creditors. There are also tax implications to taking loans from your company. 3. Keep Companies House Records Up to Date Directors are responsible for ensuring company information is correct and submitted on time, including: Confirmation statement (annually) Changes to directors, shareholders, or registered office Share allotments or transfers ⚠️ Forgetting to file updates can lead to fines or even the company being struck off the register. 4. Personal Liability Risks While limited companies are designed to protect directors, failing in your duties can remove that protection. In cases of wrongful trading or fraud, you could be held personally liable. This is why good governance - keeping proper records, acting responsibly, and filing on time - is essential. Beyond the Basics: More Responsibilities Under the Companies Act The above are just a few of the key responsibilities for directors. Under the Companies Act 2006, there are wider statutory duties too. Failing to meet these duties can have serious consequences - from fines and disqualification to personal liability in extreme cases. Final Thoughts: You’re More Than Just a Box-Ticker Being a company director is about more than filing accounts. It’s about protecting your business, running it responsibly, and staying compliant with the law. At CJL Accountancy, we don’t just tick boxes. We advise directors on the practical side of running a company - helping you avoid tax pitfalls, improve cashflow, and grow with confidence. 👉 If you’d like a proactive accountant who supports your business beyond the numbers, get in touch with CJL Accountancy today .

Running your own business is exciting - but it also comes with responsibility. One of the biggest challenges many small business owners face is staying on top of their taxes. Over the years, we’ve helped clients untangle tax messes, and the same mistakes crop up time and again. Here are the most common tax pitfalls we see – and how you can avoid them. 1. Not Saving for Tax When you’re just starting out, it’s tempting to think of every pound earned as “yours”, but HMRC will want its share. If you don’t put money aside as you go, you could be in for a nasty surprise when your tax bill arrives. How to avoid it: Set up a separate savings account and move a percentage of every payment you receive straight into it. As a rule of thumb, 20-30% works for most small businesses, but it depends on your circumstances. 2. Taking Drawings Instead of Salary/Dividends Many limited company owners don’t realise that simply “taking money out” of the business isn’t the same as being paid properly. Taking drawings can lead to tax inefficiencies or even an overdrawn director’s loan account – with an unexpected tax charge (the dreaded S455). How to avoid it: Speak to your accountant about the most tax-efficient way to pay yourself – usually a mix of salary and dividends. That way you’ll stay compliant and avoid paying more tax than necessary. Note that if you’re self-employed then the post-tax profit is yours and can be withdrawn. 3. Mixing Business and Personal Finances Using your personal bank account for business transactions might feel convenient at the start but it quickly becomes a bookkeeping nightmare. It’s easy to lose track of income and expenses, and HMRC may question the accuracy of your records. How to avoid it: Open a separate business bank account from day one. It makes bookkeeping cleaner, tax returns easier, and gives you a clearer picture of how your business is really performing. This is even more important for a limited company, the bank account must be in the company name. 4. Registering for VAT Too Late Some business owners don’t realise they need to register for VAT once their turnover passes the threshold (currently £90,000). Missing this deadline can lead to backdated VAT bills, interest and penalties – a costly mistake. How to avoid it: Track your rolling 12-month turnover. If you’re getting close to the threshold, speak to your accountant early. Sometimes it even makes sense to register voluntarily before you’re required to. 5. Missing Out on Allowable Expenses Too many business owners pay more tax than they should because they don’t claim all the expenses they’re entitled to. From home office costs to business mileage, small savings add up. How to avoid it: Keep detailed records and receipts throughout the year. If you’re unsure what you can and can’t claim, ask your accountant – we’d rather help you claim correctly than see you overpay. Final Thoughts Tax mistakes are easy to make - especially when you’re juggling everything else that comes with running a business. But with a bit of planning, good record-keeping, and the right advice, you can avoid the most common pitfalls. At CJL Accountancy, we’ve helped countless small business owners get back on track after making these mistakes – but we’d much rather help you avoid them in the first place. 👉 If you’re worried about tax or just want peace of mind that you’re doing things the right way, get in touch today .

If you’ve recently started earning income outside of PAYE, the clock is ticking. HMRC requires you to register for Self-Assessment by 5 October 2025 if you need to file a tax return for the 2024/25 tax year. Missing this deadline could lead to penalties, interest, and unnecessary stress. At CJL Accountancy, we help individuals and business owners stay compliant and avoid last-minute panic. Here’s what you need to know. Who Needs to Register for Self-Assessment? You may need to register if you had untaxed income during the 2024/25 tax year (6 April 2024 – 5 April 2025). This can include: Self-employed businesses Partners in a business partnership Company directors who receive dividends or other untaxed income Landlords earning rental income Investors with taxable savings, dividends, or capital gains Side hustlers and content creators making money from Etsy, YouTube, TikTok, or freelancing If HMRC doesn’t already know about your new income, you must tell them by registering for Self-Assessment. Why Is the 5 October Deadline Important? This deadline isn’t when you have to file or pay your tax, that comes later. Instead, it’s about telling HMRC you need to complete a tax return. 5 October 2025 – Deadline to register if you’re new to Self-Assessment for 2024/25. 31 January 2026 – Deadline to file your online return and pay any tax due. By registering on time, you’ll avoid HMRC penalties and get your Unique Taxpayer Reference (UTR) in plenty of time, which you need to file your return. How to Register for Self-Assessment The process depends on your situation: Self-employed – Register using form CWF1. Not self-employed (e.g., landlords, investors, directors) – Register using form SA1. Partnerships – Both the partnership and individual partners must register separately. You can register online via HMRC’s website, or we can handle the process for you. What Happens If You Miss the Deadline? If you fail to register by 5 October, HMRC can issue penalties for late notification. Acting early is the easiest way to stay compliant. How CJL Accountancy Can Help At CJL Accountancy, we specialise in helping people and small businesses stay on top of their tax obligations. We can: Register you for Self-Assessment File your return accurately and on time Ensure you claim all allowable expenses Help you plan for future tax bills so there are no surprises Don’t Leave It Too Late If you started earning new income in the 2024/25 tax year, remember: the deadline to register is 5 October 2025. The sooner you act, the smoother your tax return process will be. 📩 Get in touch with CJL Accountancy today , and let us take the stress out of Self-Assessment.

Just formed a UK limited company? Here's your step-by-step checklist to stay compliant, pay yourself properly, and avoid common startup mistakes.

If you're self-employed or a landlord, it’s time to start preparing for Making Tax Digital (MTD). Here’s what you need to know, and what to do now. What is Making Tax Digital? Making Tax Digital (MTD) is an HMRC initiative designed to make the UK tax system more efficient, accurate and easier for taxpayers to manage. It replaces traditional paper-based records and manual submissions with a digital-first approach. MTD affects how businesses and individuals keep their financial records and how they submit tax information to HMRC. Who Does MTD Apply To? MTD is being introduced in phases. Here’s a breakdown of who’s affected and when: ✅ Already in place: VAT-registered businesses for VAT submissions (Making Tax Digital for Business - MTDfB ) 🚨 From April 2026: Self-employed individuals and landlords with annual income over £50,000 (Making Tax Digital for Income Tax - MTD for ITSA) 🚨 From April 2027: The threshold drops to £30,000 🚨 From April 2028: The threshold drops to £20,000 There were plans to implement for corporation tax in the future too but this has been cancelled. How do you calculate your annual income? To work out whether you fall within the scope of Making Tax Digital for Income Tax (MTD for ITSA), you need to calculate your total gross turnover - not your profit. Self-employment (sole trader income before expenses) UK property income (rental income before costs) This does not include: PAYE income (employment) Pensions Dividends Interest Any other non-business income 🔍 Important: You must add together your gross self-employment income and gross property income (if you have both). If the combined total exceeds the threshold, you will fall within MTD for ITSA. What Are the Key Requirements? If you're within the scope of MTD for ITSA, you must: Keep digital records of your income and expenses Use MTD-compatible software to send tax data to HMRC File updates quarterly instead of annually Submit an end-of-period statement and final declaration annually Why You Need to Start Planning Now 🔄 Quarterly reporting is a big change Going from one annual return to five digital submissions (4 updates + 1 final declaration) is a major shift - and not something to leave until the last minute. 💻 You’ll need to use software Spreadsheets are an acceptable digital record, but you'll need compatible software for the submission to HMRC, or to use accounting software such as Xero, Quickbooks, FreeAgent, Sage etc. If you’re switching systems, you’ll need time to get comfortable with the new setup. 🧾 Better records = fewer mistakes Digital record-keeping reduces human error, which can lead to fewer HMRC penalties and more reliable cashflow management. The sooner you switch, the better for your business. 📆 Deadlines are coming fast April 2026 might seem far away, but building the right systems and habits now will save you time, stress, and money later. How CJL Accountancy Can Help At CJL Accountancy, we help businesses and landlords prepare for Making Tax Digital with: ✅ Advice on whether MTD applies to you ✅ Support choosing and setting up the right software ✅ Ongoing bookkeeping and tax compliance services ✅ Quarterly and annual reporting support under MTD rules Whether you're unsure if you're affected or already feeling overwhelmed, we’re here to help you navigate MTD with confidence. FAQs: Making Tax Digital Q: Do I need to register for MTD? A: Yes, you’ll need to register when MTD ITSA applies to your income level. Q: Can I still use spreadsheets? A: Spreadsheets can be used with bridging software. Q: What software do I need? A: You can either: Use spreadsheets + bridging software, or Switch to MTD-compatible software like Xero, QuickBooks, FreeAgent or Sage. We can help you choose the best option. Q: What if I don’t comply? A: HMRC will apply penalties for non-compliance, including missed deadlines or failure to keep proper records. Don’t Wait – Let’s Get You MTD-Ready Making Tax Digital isn’t going away – and the sooner you act, the easier the transition will be. Whether you’re a landlord or self-employed, CJL Accountancy is here to make things clear, simple, and stress-free. 📞 Get in touch today to start your digital tax journey with expert support every step of the way.

If you’re a landlord or property investor in the UK, you might be wondering: Does VAT apply to rental income? When should a landlord register for VAT? What about VAT on commercial property? VAT and property can be complex, but understanding the basics could help you make better investment decisions and avoid costly mistakes. At CJL Accountancy, we help landlords navigate VAT, tax, and property finances with confidence. Here's your essential guide to VAT for landlords. Is There VAT on Residential Rental Income? In most cases, residential rental income is exempt from VAT. This means: ✅ You do not charge VAT to your residential tenants. ❌ You also cannot reclaim VAT on expenses related to residential lettings. Common residential lettings that are VAT-exempt: Houses, flats, apartments rented to private tenants Student accommodation Housing association lets However, because the income is exempt, you can't reclaim VAT on: Repairs and maintenance Estate agent or letting agent fees Legal and professional costs Are There Exceptions for Residential Property VAT? Yes, if you let out properties as holiday accommodation, you may need to register and charge VAT. See our general VAT guide here. VAT on Commercial Property For commercial property, VAT works differently. Commercial property rental is generally exempt from VAT, but landlords can "opt to tax”, allowing them to: ✅ Charge VAT on rent (typically at 20%) ✅ Reclaim VAT on associated costs (repairs, refurbishments, professional fees) This is especially useful if: You’re leasing to VAT-registered businesses You’ve incurred VAT on refurbishment or construction You want to recover VAT on professional services Opting to Tax: Things to Consider Once elected, the option usually applies for 20 years. Opting to tax can complicate matters for tenants who are not VAT-registered. You must formally notify HMRC when opting to tax. Should a Landlord Register for VAT? You must register for VAT if your VAT-taxable turnover (from holiday lets, opted commercial property rents, or other taxable activities) exceeds £90,000 in a 12-month period. If your activities are a mix of exempt (e.g. residential rent) and taxable (e.g. holiday lets, opted commercial property) then it can be complex. Can Landlords Reclaim VAT? ✅ On residential lettings: No - unless it's a holiday let or part of a taxable business. ✅ On commercial property with an option to tax: Yes - you can reclaim VAT on related expenses. How CJL Accountancy Can Help Landlords At CJL Accountancy, we help residential and commercial landlords with VAT registration and compliance. Quick FAQs – VAT for Landlords Q: Do I need to charge VAT on residential rent? A: No, residential rent is usually VAT-exempt. Q: Do I charge VAT on commercial property rent? A: Not by default, but you can opt to tax and charge VAT to reclaim expenses. Q: What about holiday lets? A: If your holiday let income exceeds £90,000 in 12 months, you must register for VAT and charge it on bookings. Q: Can I reclaim VAT on a property refurbishment? A: Only if the property is part of a taxable supply, like an opted commercial property or a holiday let. Final Thoughts VAT for landlords can be complex, especially if you have mixed residential and commercial property. Getting the VAT treatment right can save you money - or help you avoid costly penalties. Contact CJL Accountancy today to get clear, practical advice for your property business.