Landlords filing their self-assessment tax returns this month could face larger-than-expected bills, according to an accountancy firm. 

Managing director Lee Murphy of an accountancy firm says the unexpectedly high charges may stem from HMRC’s scheduling.

He says: “Slow down for ten minutes and understand what the payment actually includes.” 

He sets out several reasons why landlords may be hit with unexpected bills — including more than one payment could be landing at once.

“People often think they’re paying for one year, but January can include more than that — you could be paying what you owe for this tax return, and an upfront payment towards your next bill. That’s why the total can look higher than expected.”

If your income has increased it could change the calculation

If you’ve had a stronger year than last year, your tax will naturally be higher and it can also affect what you’re asked to pay going forward.”

Allowances didn’t apply as you expected

“Small changes can have a bigger impact than people realise. It’s worth double-checking your personal allowance position and whether anything has reduced it.”

Allowable expenses or reliefs were missed

“This is really common when people are rushing. If your records weren’t complete, you may have missed legitimate expenses and that can inflate the bill.”

Extra income was overlooked

“Side work, interest, dividends — it’s easy to forget smaller income streams until it’s time to add them to your tax return. Missing them can throw off the total and lead to surprises.”

Things weren’t reported correctly

“Double-check that the information reported to HMRC by your employer (or contractor if you’re paying CIS tax) is accurate, and reflects what you have on your payslips – and what arrived into your bank account!”

And of course the HMRC is offering further help for landlords.