Non residents landlord scheme
Complying with the scheme
To comply with the scheme, tenants and letting agents must
- register with the HMRC Charity, Savings and International department within 30 days of the date on which they are first required to operate the scheme– letting agents should use form NRL4i and tenants should write to HMRC
- work out the tax to be deducted each quarter
- send quarterly payments of tax deducted to HMRC Accounts Office, Shipley
- send a report to HMRC and the landlord by 5 July after the end of the tax year on form NRLY
- provide the non-resident landlord with a certificate of tax deducted each year (on form NRL6)
- keep records for four years to show that they have complied with the scheme
Calculating the tax
Tax should be calculated on a quarterly basis on:
- any rental income paid to the landlord in the quarter
- any payments that they make in the quarter to third parties which are not ‘deductible payments’
Deductible payments are those that the tenant or letting agent can be ‘reasonably satisfied’ will be deductible in computing the profits of the landlord’s property rental business. Reassuringly, in their guidance, HMRC state that they ‘do not expect letting agents and tenants to be tax experts’.
The quarters run to 30 June, 30 September, 31 December and 31 March. The tax deducted must be paid over to HMRC within 30 days of the end of the quarter.
The non-resident landlord
The non-resident landlord can set the tax deducted under the scheme against that payable on the profits of his or her property rental business.
Author Signature :
Sanjay K Sah (Director | FCCA, CPA, MSC, BSC)
Makesworth Accountants are Award Winning Accountancy Practice of Chartered Certified Accountants Tax and business advisers. We are always ahead to embrace the latest technology and up to date informat..