Index of the Article:
Audio Summary of the Key Points About SA105 Form
Understanding the SA105 Form – Purpose, Requirements & Key Figures
What is the SA105 Form?
The SA105 form is a supplementary page that accompanies the SA100 Self-Assessment tax return. It is specifically for individuals who earn income from UK property and need to declare their rental income and related expenses to HMRC.
Who Needs to Fill in an SA105 Form?
You must complete an SA105 form if you:
✅ Own rental property in the UK and receive income from it.
✅ Rent out a furnished holiday home in the UK or European Economic Area (EEA).
✅ Sublet a room in your home (if you exceed the £7,500 tax-free Rent-a-Room Scheme allowance).
✅ Are a joint owner of a rental property and need to declare your share of the income.
✅ Rent out land, garages, or parking spaces and earn taxable income from them.
You do not need to complete an SA105 if:
❌ Your rental income is below £1,000 (covered by the Property Income Allowance).
❌ You rent out a room in your home but earn less than £7,500 (under the Rent-a-Room Scheme).
❌ Your property business is incorporated (companies report rental income via Corporation Tax, not SA105).
How Much Rental Income is Taxable?
As of the 2024/25 tax year, rental income is taxed as part of your total taxable income. The tax bands in England, Wales, and Northern Ireland are:
Tax Band | Taxable Income | Tax Rate on Rental Income |
Personal Allowance | Up to £12,570 | 0% |
Basic Rate | £12,571 - £50,270 | 20% |
Higher Rate | £50,271 - £125,140 | 40% |
Additional Rate | Over £125,140 | 45% |
Example:
If you earn £30,000 from your job and £15,000 in rental income, your total taxable income is £45,000.
You would pay 20% tax on the portion of rental income that falls within the Basic Rate band.
What Rental Income Do You Need to Declare?
Your total rental income includes:
✔️ Rent payments from tenants.
✔️ Any non-refundable deposits received.
✔️ Service charges paid by tenants (e.g., cleaning fees, utility bills if included in the rent).
✔️ Insurance payouts if they replace lost rental income.
✔️ Payments for lease extensions (if applicable).
What Expenses Can You Deduct on an SA105?
You can reduce your taxable income by claiming allowable expenses, such as:
Mortgage interest (only the basic rate tax relief applies).
Property repairs & maintenance (e.g., fixing leaks, repainting).
Utility bills (if you cover them).
Letting agent & property management fees.
Buildings and contents insurance.
Council tax (if paid by you instead of tenants).
Ground rent & service charges (for leasehold properties).
🚨 Expenses You CANNOT Claim:
❌ Capital improvements (e.g., adding a new extension).
❌ Your own time and labour spent managing the property.
❌ Mortgage repayments (only the interest portion qualifies for tax relief).
What Happens If You Don’t File an SA105?
Failing to report rental income correctly can result in HMRC penalties. Here’s a summary of the fines for late filing:
Time After Deadline | Penalty |
1 day late | £100 fixed fine |
3 months late | £10 per day (up to £900) |
6 months late | 5% of tax owed or £300 (whichever is higher) |
12 months late | 5% of tax owed or £300 (whichever is higher) |
Example: If you owe £3,000 in tax and submit your SA105 a year late, you could pay up to £1,500 in penalties.
👉 Avoid fines by filing your Self-Assessment on time!
Key Deadlines for SA105 Submission
Action | Deadline |
Register for Self-Assessment | 5 October 2024 |
Paper tax return submission | 31 October 2024 |
Online tax return submission | 31 January 2025 |
Pay any tax owed | 31 January 2025 |
If you miss the January 31st deadline, HMRC will charge interest on late payments.
Summary
✅ The SA105 form is mandatory for UK landlords & property owners earning rental income.
✅ You need to declare all rental income above £1,000 (or £7,500 under the Rent-a-Room Scheme).
✅ Allowable expenses reduce your taxable income – but capital improvements are not deductible.
✅ Failure to file on time can lead to severe penalties from HMRC.
How to Fill in an SA105 Form – A Step-by-Step Guide
Now that we understand who needs to complete an SA105 form and the key tax figures related to property income, let’s break down how to fill in the form correctly. Many landlords make mistakes when completing this supplementary page, leading to delays, tax overpayments, or penalties from HMRC.
1. Where to Get the SA105 Form
You can download the latest SA105 form for the 2023–2024 tax year directly from the HMRC website. If you file your Self-Assessment tax return online, the SA105 form is automatically included when you indicate that you have property income.
2. Breakdown of the SA105 Form Sections
The SA105 form consists of four main sections:
1️⃣ Income from UK Property
2️⃣ Expenses & Allowances
3️⃣ Adjusted Profit or Loss
4️⃣ Taxable Profit and Losses Carried Forward
Let’s go through each section step by step.
Step 1: Income from UK Property
👉 What to report: In this section, you must declare all rental income received during the tax year.
Box No. | What to Enter | Example |
Box 1 | Total rents and income from UK property | £18,000 (annual rent from tenants) |
Box 2 | Income from UK furnished holiday lettings (FHL) | £6,500 (if you rent out an Airbnb that qualifies as an FHL) |
Box 3 | Premiums for granting a lease | £2,000 (if a tenant paid you an upfront lease premium) |
🚨 Common Mistakes:
Not declaring all sources of rental income. If your tenant pays you separately for utilities or other services (e.g., cleaning fees), these must be included.
Confusing FHL with normal rental income. FHL (Furnished Holiday Lettings) have different tax rules, so ensure you enter them separately in Box 2.
Step 2: Claiming Allowable Expenses
👉 What to report: This section allows you to deduct legitimate costs associated with renting out the property.
Box No. | Expense Type | Example |
Box 4 | Rent, rates, insurance, ground rents | £1,200 (annual buildings insurance) |
Box 5 | Property repairs and maintenance | £3,000 (fixing a leaking roof) |
Box 6 | Loan interest and financial costs | £2,500 (mortgage interest – see note below) |
Box 7 | Legal, management, and professional fees | £800 (letting agent fees) |
Box 8 | Other allowable property expenses | £400 (advertising costs for new tenants) |
🔹 Important: Since April 2020, you cannot deduct full mortgage interest as an expense. Instead, you receive a basic rate tax relief of 20% on mortgage interest payments.
🚨 Common Mistakes:
Incorrectly claiming capital improvements. Major upgrades (e.g., adding a conservatory) are not deductible.
Not keeping receipts. HMRC may ask for proof of expenses, so retain all invoices.
Step 3: Adjusted Profit or Loss Calculation
Once you enter your income and expenses, the form will calculate your net rental profit or loss.
Box No. | What to Enter | Example |
Box 11 | Total profit for the tax year | £10,000 |
Box 14 | Total loss for the tax year | £0 (if you made a profit) |
💡 Example Calculation:
Total rental income: £18,000
Allowable expenses: £8,000
Adjusted profit: £10,000 (this goes into Box 11)
🚨 Common Mistakes:
Forgetting to claim losses carried forward. If you made a loss in previous years, you can carry it forward to offset future profits (Box 16).
Step 4: Taxable Profit and Losses Carried Forward
This section is only needed if you have rental losses from previous tax years that you want to offset.
Box No. | What to Enter | Example |
Box 16 | Loss brought forward from previous years | £2,500 |
Box 17 | Total loss carried forward to the next year | £2,500 |
🚨 Common Mistakes:
Not carrying forward previous losses. If you had a rental loss last year, you can reduce this year’s taxable income by carrying it forward.
3. How to Submit the SA105 Form
Once you complete the SA105 form, you can submit it along with your main SA100 Self-Assessment tax return.
Submission Methods
✅ Online filing (recommended): The SA105 is automatically included when you select “UK property income” in your online Self-Assessment.
✅ Paper submission: Download the SA105 form here, print it, and mail it to HMRC before 31 October 2025.
4. What Happens After You Submit SA105?
After submitting your SA105, HMRC will process your return and determine:
If you owe additional tax (payment deadline: 31 January 2025).
If you are due a tax refund (if you overpaid tax).
🚨 Possible HMRC Actions:
A tax rebate: If you overpaid tax, HMRC will issue a refund, usually within 4–6 weeks.
An enquiry or audit: If HMRC suspects incorrect reporting, they may request supporting documents (e.g., receipts, rental contracts).
5. Summary
✅ The SA105 form consists of four sections: Income, Expenses, Profit Calculation, and Losses Carried Forward.
✅ Make sure you declare all income sources, including rent, premiums, and insurance payouts.
✅ Claim all allowable expenses, but avoid claiming capital improvements.
✅ Use online filing for a faster and easier process.
✅ After submission, HMRC may issue a tax rebate or request further details.
How to Fill Form SA105 – A Question by Question Guide
The SA105 form is used to report income from UK property as part of a Self-Assessment tax return. This guide will walk through each section, explain what HMRC requires, and provide sample answers to help ensure correct completion.
Section 1: General Property Information
1. Number of properties rented out
📌 What to enter: The total number of rental properties you let out during the tax year.
✅ Sample Answer: If you rented out three properties in 2023–24, enter "3".
2. If all property income ceased in 2023–24 and you do not expect to receive such income in 2024–25, put ‘X’ in the box
📌 What to enter: If you stopped renting out property permanently, mark this box with an "X".
✅ Sample Answer: If you sold your rental property in September 2023, put "X".
3. If you have any income from property let jointly, put ‘X’ in the box
📌 What to enter: If your rental property is co-owned (e.g., with a spouse or business partner), mark "X".
✅ Sample Answer: If you co-own a buy-to-let property with your brother, put "X".
4. If you’re claiming Rent a Room relief and your rents are £7,500 or less (£3,750 if let jointly), put ‘X’ in the box
📌 What to enter: If you rent out a furnished room in your home and are eligible for Rent-a-Room relief, mark "X".
✅ Sample Answer: If you rented a room in your house for £500 per month, put "X".
Section 2: Income from UK Property
5. Total rents and other income from property
📌 What to enter: The total rental income before expenses.
✅ Sample Answer: If you received £1,500 per month from tenants, enter "18,000" (£1,500 × 12).
6. Property income allowance – read the notes
📌 What to enter: If you are claiming the £1,000 property income allowance, enter "1,000" here. If not, leave it blank.
✅ Sample Answer: If your total expenses were less than £1,000, enter "1,000".
7. If you’ve used traditional accounting rather than cash basis to calculate your income and expenses, put ‘X’ in the box
📌 What to enter: Most landlords use cash basis accounting. If you used accrual (traditional) accounting, mark "X".
✅ Sample Answer: If you used the cash basis, leave blank. If you used traditional accounting, put "X".
Section 3: Allowable Expenses
8. Rent paid, repairs, insurance, and costs of services provided
📌 What to enter: Include insurance, maintenance, cleaning costs, etc.
✅ Sample Answer: If you paid £1,000 for insurance and £2,500 for repairs, enter "3,500".
9. Loan interest and other financial costs
📌 What to enter: Mortgage interest only (not repayments).
✅ Sample Answer: If you paid £4,000 in mortgage interest, enter "4,000".
10. Legal, management, and other professional fees
📌 What to enter: Includes letting agent fees, legal costs, accountant fees related to property.
✅ Sample Answer: If you paid £1,200 to a letting agent, enter "1,200".
11. Other allowable property expenses
📌 What to enter: Includes advertising, safety certificates, admin costs.
✅ Sample Answer: If you spent £300 on advertising, enter "300".
Section 4: Profit & Loss Calculations
12. Private use adjustment
📌 What to enter: If you used part of the property for personal use, adjust expenses accordingly.
✅ Sample Answer: If 10% of the property was personal use, enter "10%".
13. Balancing charges
📌 What to enter: If you sold an asset (e.g., furniture) for more than its tax value, enter the amount here.
✅ Sample Answer: If you sold a washing machine for £250, enter "250".
14. Electric charge-point allowance
📌 What to enter: If you claimed capital allowances for electric charge points, enter the total.
✅ Sample Answer: If you installed a charging station for £500, enter "500".
15. Zero-emission car allowance
📌 What to enter: If you bought an electric vehicle for property business use, enter the cost.
✅ Sample Answer: If you bought an electric car for £20,000, enter "20,000".
16. Other capital allowances
📌 What to enter: Includes security systems, office equipment, etc.
✅ Sample Answer: If you installed a £2,500 CCTV system, enter "2,500".
17. Adjusted profit for the year
📌 What to enter: Rental income minus total expenses.
✅ Sample Answer: If income = £18,000 and expenses = £8,000, enter "10,000".
18. Loss brought forward used against this year’s profits
📌 What to enter: If you had losses from last year, enter the amount used to offset profits.
✅ Sample Answer: If last year's loss was £3,000, enter "3,000".
19. Taxable profit for the year
📌 What to enter: Profit after adjusting for losses.
✅ Sample Answer: If adjusted profit is £10,000 and brought forward loss = £3,000, enter "7,000".
20. Loss for the year
📌 What to enter: If expenses exceed rental income, enter the loss amount.
✅ Sample Answer: If expenses were £12,000 but income was £10,000, enter "2,000".
Section 5: Income Adjustments
21. Tax taken off any income in box 20
📌 What to enter:If tax was deducted at source (before you received it) from your rental income, enter the amount deducted.
✅ Sample Answer: If your tenant deducted £500 for tax and paid you the remaining rent, enter "500".
22. Premiums for the grant of a lease – from box E on the working sheet
📌 What to enter:If a tenant paid a lump sum upfront for a lease extension, enter the taxable portion of that amount.
✅ Sample Answer: If you received £3,000 as a lease premium, enter "3,000".
23. Reverse premiums and inducements
📌 What to enter:If you paid a tenant or business to take over a lease, enter that cost here.
✅ Sample Answer: If you paid a commercial tenant £1,500 to vacate early, enter "1,500".
Section 6: Property Expenses
24. Rent, rates, insurance, and ground rents
📌 What to enter:Include all regular property-related costs, such as insurance, ground rent, and council tax (if paid by you, not the tenant).
✅ Sample Answer: If you paid £1,200 for buildings insurance and £800 for council tax, enter "2,000".
25. Property repairs and maintenance
📌 What to enter:Include costs of repairs, such as fixing a roof, replacing broken fixtures, or plumbing repairs.
✅ Sample Answer: If you spent £2,500 on roof repairs, enter "2,500".
🚨 Warning: Capital improvements (e.g., adding a new extension) do not qualify as repairs.
26. Non-residential property finance costs
📌 What to enter:If you own commercial or non-residential property, enter the finance costs here.
✅ Sample Answer: If you paid £3,000 in loan interest on a commercial unit, enter "3,000".
27. Legal, management, and other professional fees
📌 What to enter:Include letting agent fees, legal fees for tenancy agreements, and accountant fees related to the property.
✅ Sample Answer: If you paid £900 to a letting agent, enter "900".
28. Costs of services provided, including wages
📌 What to enter:If you provide services (e.g., gardening, cleaning, security) and pay for them yourself, enter the amount spent.
✅ Sample Answer: If you paid a cleaner £600 and a gardener £400, enter "1,000".
29. Other allowable property expenses
📌 What to enter:Include miscellaneous property-related costs, such as advertising, property management software, or key replacements.
✅ Sample Answer: If you spent £300 on advertising for tenants, enter "300".
Section 7: Property Adjustments and Capital Allowances
30. Private use adjustment
📌 What to enter:If part of the property was used for personal purposes, adjust expenses accordingly.
✅ Sample Answer: If you used 10% of a rental property for personal purposes, enter "10%".
31. Balancing charges
📌 What to enter:If you sold or disposed of property assets (e.g., furniture) for more than their tax value, enter the profit amount.
✅ Sample Answer: If you sold a washing machine for £250, enter "250".
32. Annual Investment Allowance
📌 What to enter:If you purchased qualifying capital items (e.g., business equipment for rental management), enter the amount.
✅ Sample Answer: If you bought a £3,000 security system, enter "3,000".
33. The Structures and Buildings Allowance
📌 What to enter:If you built or renovated a structure for rental purposes, enter the cost eligible for tax relief.
✅ Sample Answer: If you built a new storage shed costing £5,000, enter "5,000".
34. Zero-emission goods vehicle allowance
📌 What to enter:If you purchased a zero-emission commercial vehicle for property management, enter the amount.
✅ Sample Answer: If you bought a £25,000 electric van, enter "25,000".
.
35. All other capital allowances
📌 What to enter:Includes any remaining capital allowances not covered in other sections.
✅ Sample Answer: If you claimed £1,200 for new security locks, enter "1,200".
Section 8: Taxable Profit or Loss Calculation
36. Costs of replacing domestic items – for residential lettings only
📌 What to enter:Claim the cost of replacing furniture, carpets, and appliances.
✅ Sample Answer: If you replaced a fridge for £500, enter "500".
37. Rent a Room exempt amount
📌 What to enter:If you used Rent-a-Room relief, enter the exempt amount (£7,500 or £3,750 if joint).
✅ Sample Answer: Enter "7,500" if you earned that amount or less.
38. Adjusted profit for the year
📌 What to enter:Subtract total expenses from total income to find your profit.
✅ Sample Answer: If rental income = £15,000 and expenses = £6,000, enter "9,000".
39. Loss brought forward used against this year’s profits
📌 What to enter:If you had prior year rental losses, enter the amount used to offset this year’s profit.
✅ Sample Answer: If you had £2,000 losses from last year, enter "2,000".
40. Taxable profit for the year (Box 38 minus Box 39)
📌 What to enter:Subtract Box 39 (losses) from Box 38 (adjusted profit).
✅ Sample Answer: If adjusted profit = £9,000 and losses carried forward = £2,000, enter "7,000".
Filling out Form SA105 correctly ensures that you report property income accurately while claiming all allowable deductions. By following this guide, landlords can:
Minimize tax liabilities by claiming valid expenses.
Ensure compliance with HMRC regulations.
Reduce the risk of penalties for incorrect filings.
If you need additional guidance, visit HMRC’s official tax return page.
SA105 Common Mistakes & Tax-Saving Strategies for Landlords
Navigating the SA105 form can be tricky, especially if you’re new to property income reporting. In this section, we’ll explore common mistakes landlords make when completing the SA105 form, and share strategies to help you save on taxes while staying compliant with HMRC regulations.
Common Mistakes to Avoid on the SA105 Form
1. Mixing Up Capital Improvements with Repairs
One of the most common mistakes landlords make is confusing capital improvements with property repairs.
Repairs are costs incurred to restore the property to its original condition (e.g., fixing a broken boiler or repainting walls). These are deductible expenses.
Capital improvements, on the other hand, are enhancements that increase the property’s value (e.g., adding a new bathroom or an extension). These are not deductible but can be considered for Capital Gains Tax relief when you sell the property.
Example: If you replace a broken window with the same type, it's a repair. If you upgrade all windows to double glazing, it's a capital improvement.
2. Forgetting to Claim for All Allowable Expenses
Many landlords miss out on significant tax savings by not claiming all allowable expenses. Beyond the usual maintenance and insurance costs, consider these often-overlooked expenses:
Advertising costs: Paid to promote your property for rent.
Accountant fees: If you hire an accountant to help with your tax return.
Subscriptions: To landlord associations or property management software.
Utility bills: If they are included in the rent and you cover them.
3. Not Keeping Adequate Records
HMRC expects you to maintain detailed records for each tax year. Lack of documentation can lead to disallowed claims or even penalties. Ensure you keep:
Receipts and invoices for all expenses claimed.
Bank statements showing rent payments.
Tenancy agreements and lease documents.
4. Misreporting Income from Jointly Owned Properties
If you co-own a property, each owner must report their share of the income. The default split is usually 50/50, but you can declare a different ratio if supported by a Declaration of Trust.
Example: Sarah and John own a rental property, with Sarah owning 75% and John 25%. They should report their respective shares of the rental income and expenses.
5. Missing Out on the Rent-a-Room Scheme
If you rent out a furnished room in your main home, you can earn up to £7,500 tax-free under the Rent-a-Room Scheme. If you earn more, only the amount exceeding £7,500 is taxable.
Tip: Opting into the scheme is simple – just tick the relevant box on your Self-Assessment form.
Top Tax-Saving Strategies for Landlords
1. Maximizing Allowable Expenses
Make sure to claim every legitimate expense related to your rental property. Here’s a quick checklist of commonly missed deductions:
Council Tax (if paid by you and not the tenant).
Travel expenses for property visits (keep a mileage log).
Replacement of domestic items (e.g., furnishings, appliances).
2. Using the Property Income Allowance
If your gross rental income is less than £1,000 per year, you can use the Property Income Allowance. This means you don’t need to declare or pay tax on this income. If your income exceeds £1,000, you can either:
Deduct the £1,000 allowance from your rental income.
Claim your actual expenses if they exceed £1,000.
3. Splitting Income to Reduce Tax Liabilities
If you’re married or in a civil partnership, consider transferring part of the property ownership to your lower-earning spouse to take advantage of their Personal Allowance and lower tax bands. This must be done legally through a Declaration of Trust.
Example: Alex earns £60,000 a year, while his spouse Jamie earns £10,000. By transferring a portion of property ownership to Jamie, they can lower their combined tax bill.
4. Claiming Tax Relief on Finance Costs
Although the rules have changed, you can still claim a 20% basic rate tax reduction on mortgage interest payments. Make sure to complete the relevant section on the SA105 form.
5. Timing Repairs and Maintenance
Strategically timing your expenses can optimize your tax situation. For instance, if you anticipate higher rental income in a future tax year, consider deferring major repairs until then to maximize deductions.
Penalties and Interest for Mistakes
Making errors on your SA105 form can lead to penalties and interest charges. HMRC distinguishes between:
Careless errors: If you fail to take reasonable care (penalty of up to 30% of extra tax due).
Deliberate errors: Intentionally submitting incorrect information (penalty of up to 70% or more).
Example: If you underreport rental income by £5,000 due to a careless error, and your tax rate is 20%, you could face a penalty of up to £300.
Frequently Overlooked Reliefs and Deductions
Replacement of Domestic Items Relief
This covers the cost of replacing furnishings and appliances, such as:
Sofas, beds, carpets, curtains.
White goods (e.g., fridges, washing machines).
This relief applies only if the items are replaced on a like-for-like basis.
Wear and Tear Allowance
Although the 10% wear and tear allowance was abolished in 2016, landlords of furnished properties can still claim the actual cost of replacing worn-out items.
Tips for Online Filing of SA105
Use HMRC’s online portal for faster submission and processing.
Double-check each entry before submission to avoid errors.
Keep a digital copy of your completed SA105 for future reference.
Summary
✅ Avoid common pitfalls like confusing repairs with capital improvements.
✅ Maximize tax reliefs and allowances available to you.
✅ Use strategies like income splitting and the Property Income Allowance to reduce your tax bill.
✅ Keep detailed records to substantiate your claims.
✅ Always file your returns on time to avoid penalties and interest charges.
SA105 Submission Methods & What Happens After Filing
Now that we’ve covered how to complete the SA105 form correctly and tax-saving strategies for landlords, let’s dive into the submission process. Many taxpayers are unsure whether to file online or via paper, how HMRC processes their return, and what to do if their tax calculation doesn’t match their expectations.
This section will explain the different methods of submission, the pros and cons of each, and what happens after you file your SA105 form.
How to Submit the SA105 Form
You can submit your SA105 form to HMRC in one of two ways:
1️⃣ Online submission (recommended method)
2️⃣ Paper submission (by post)
Each method has its own deadlines, advantages, and potential issues. Let’s explore both in detail.
1. Online Submission: The Fastest & Easiest Method
How it works:
You log in to your HMRC online account or use commercial tax software.
The SA105 form is automatically included when you select “UK Property Income” in your Self-Assessment tax return.
You fill out the sections digitally and submit everything in one go.
HMRC instantly acknowledges receipt, and you can track your tax calculation in real-time.
Deadlines:📅 Online submission deadline: 31 January 2025
Pros of online submission:
✅ Instant confirmation from HMRC that your return has been received.
✅ Automatic calculations reduce errors.
✅ Faster processing (typically within a few weeks).
✅ Easier to amend mistakes before the deadline.
✅ Integrated with accounting software like QuickBooks or Xero.
Cons of online submission:
❌ Requires setting up an HMRC Government Gateway account (can take time if you’re new to it).
❌ If you need help, HMRC helplines are often busy during peak tax season.
Who should use this method?
✅ Most landlords – especially those who want faster processing and fewer errors.
✅ Anyone filing close to the deadline (since online filing is open until 31 January).
2. Paper Submission: The Traditional Route
How it works:
Download and print the SA105 form from GOV.UK.
Fill in the form by hand and attach it to your SA100 tax return.
Mail it to HMRC at the address on the form.
Deadlines:📅 Paper submission deadline: 31 October 2024
Pros of paper submission:
✅ Useful for those not comfortable with online systems.
✅ Allows you to keep a physical record of your submission.
Cons of paper submission:
❌ Much slower processing (can take months).
❌ No instant confirmation – you won’t know if HMRC received it until later.
❌ Prone to errors (handwritten entries can be misread).
❌ Higher risk of late filing penalties due to postal delays.
Who should use this method?
✅ People who prefer paper filing and don’t mind waiting longer for processing.
✅ Those who have an accountant handling their tax return via paper.
What Happens After You Submit the SA105 Form?
Once your SA105 form is submitted, HMRC processes your return and calculates how much tax you owe (or whether you’re due a refund).
Here’s what to expect:
1. HMRC Acknowledgement
Online submission: You receive an instant confirmation in your HMRC account.
Paper submission: No confirmation – you’ll need to wait for HMRC to process your return.
2. Tax Calculation & Payment
HMRC will assess your return and provide:
A tax bill (if you owe more tax).
A refund (if you overpaid tax).
📅 Tax payment deadline: 31 January 2025
💡 Tip: You can check your tax bill by logging into your HMRC online account under the ‘View Your Tax Return’ section.
3. Tax Refunds (If You Overpaid)
If you overpaid tax, HMRC will process a refund automatically.
Online submission: Refunds are typically processed within 2–4 weeks.
Paper submission: Refunds can take up to 12 weeks or more.
🚀 Fastest way to get a refund: Provide your bank details when submitting your return – HMRC will transfer the refund directly to your account.
4. HMRC Enquiries & Audits
If HMRC spots discrepancies or unusual claims, they may launch a compliance check (informally known as a ‘tax audit’).
🔹 What triggers an enquiry?
Large expenses that seem excessive compared to rental income.
Significant losses claimed multiple years in a row.
Inconsistent income reporting compared to previous years.
Failing to declare all sources of income (HMRC cross-checks data with letting agents and banks).
📌 How to avoid problems:
✅ Keep accurate records (HMRC requires you to retain documents for at least 5 years).
✅ Ensure expenses are reasonable and backed by receipts.
✅ If you make a mistake, amend your return as soon as possible.
What If You Need to Amend Your SA105 Form?
Mistakes happen – and HMRC allows you to correct errors after submission.
✅ Online return: You can log in to HMRC online services and edit your return until 31 January 2026 (for the 2023/24 tax year).
✅ Paper return: You need to send a revised version of the SA105 form by post with a note explaining the changes.
Dealing With Late Payments & Penalties
If you miss the 31 January 2025 deadline for paying your tax bill, HMRC will charge:
Time Overdue | Penalty |
1 day late | £100 fixed fine |
3 months late | £10 per day (up to £900) |
6 months late | 5% of unpaid tax or £300 (whichever is higher) |
12 months late | Another 5% of unpaid tax or £300 |
📌 Interest on Late PaymentsIn addition to penalties, HMRC will charge daily interest (current rate: 7.75% as of January 2025).
🚀 Avoid penalties by setting up a Direct Debit payment plan if you can’t afford to pay in full.
Summary
✅ Online submission is faster, easier, and provides instant confirmation.
✅ Paper filing is slow, more prone to errors, and has an earlier deadline.
✅ After submission, HMRC calculates your tax bill or refund.
✅ HMRC may investigate your return if they spot discrepancies.
✅ Corrections can be made online (until January 2026) or by post.
✅ Late tax payments incur penalties and interest, so pay on time!.
Future Tax Planning & Key Changes in 2025 for SA105 Filers
As tax laws and HMRC regulations evolve, landlords and property owners need to stay ahead of upcoming changes that could impact their tax liabilities. In this final section, we’ll look at the latest updates affecting SA105 filers, tax planning strategies for 2025 and beyond, and how landlords can prepare for potential regulatory changes.
Key Changes Affecting SA105 Filers in 2025
1. Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA)
From April 2026, landlords with property income exceeding £50,000 will be required to file digital tax records under the Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) scheme.
What this means for SA105 filers:
Instead of submitting an annual tax return, landlords will need to report income and expenses quarterly using MTD-compatible software.
A final submission will be required at the end of the tax year to adjust for any reliefs and allowances.
From April 2027, the threshold for mandatory MTD reporting will reduce to £30,000.
How to prepare:
If you earn more than £50,000 in rental income, start using digital accounting software now to track property income and expenses.
Consider working with an accountant who is familiar with MTD regulations.
2. Capital Gains Tax (CGT) Adjustments
While Capital Gains Tax (CGT) is separate from rental income tax, it is important for landlords who plan to sell a property.
For the 2024-25 tax year, CGT rates remain:
18% for basic-rate taxpayers
24% for higher-rate taxpayers (reduced from 28% in the Spring Budget 2024)
The annual CGT exemption allowance was also reduced to £3,000 per person (previously £6,000).
Tax planning tip:
If you are planning to sell a rental property, consider timing the sale strategically to minimize CGT liability.
3. Interest Rate Impact on Landlord Tax Bills
Rising interest rates in 2024-25 mean higher mortgage costs for landlords. While landlords can no longer deduct full mortgage interest from their rental income, they still receive a basic rate tax relief of 20 percent on mortgage interest payments.
What landlords can do:
Review mortgage deals and consider switching to a lower fixed rate if possible.
Assess whether incorporating a property business (operating through a limited company) is more tax-efficient.
4. Potential Reforms to Council Tax & Landlord Licensing
Some local councils are considering new licensing schemes and higher council tax charges for landlords with vacant properties or second homes.
How to prepare:
Check your local council’s website for any upcoming changes in licensing or taxation policies.
If your property is empty between tenants, consider renting it out on a short-term basis to avoid additional charges.
Landlord Tax Planning Strategies for 2025 and Beyond
1. Structuring Property Ownership for Tax Efficiency
Depending on your income level and property portfolio, different ownership structures can offer tax advantages.
Ownership Type | Tax Implications |
Individual ownership | Rental income is taxed at your personal income tax rate. Limited mortgage interest relief. |
Joint ownership | If owned with a spouse, income can be split to optimize tax allowances. |
Limited company | Corporation Tax (currently 25 percent) applies to profits, but full mortgage interest deduction is allowed. |
If you have a large property portfolio, incorporating your property business might reduce tax liability in the long run. However, transferring existing properties to a company may trigger CGT and Stamp Duty Land Tax (SDLT), so professional advice is recommended.
2. Timing Large Property Expenses
If you plan significant property repairs or replacements, it may be worth timing them strategically to optimize tax deductions.
Example:If your rental income is higher this year but expected to be lower next year, consider bringing forward repairs to reduce this year’s taxable income.
3. Using a Spouse’s Allowances & Tax Bands
If your spouse is in a lower tax band, transferring a portion of rental income to them can reduce overall tax liability. This is particularly effective if:
One partner is a basic-rate taxpayer while the other is a higher-rate taxpayer.
The lower-earning spouse has unused Personal Allowance (£12,570 for 2024-25).
A Declaration of Trust and Form 17 submission to HMRC is required for an unequal income split.
4. Keeping Detailed Digital Records
With Making Tax Digital approaching, landlords should already be keeping accurate digital records of rental income and expenses.
Best practices:
Use property management or accounting software that integrates with HMRC’s systems.
Keep receipts, invoices, and bank statements for at least five years after filing.
What to Expect in Future Budgets & Tax Updates
Although the Autumn 2024 Budget did not introduce major changes to landlord taxation, here are some areas to watch in 2025 and beyond:
Further reductions in CGT allowances for property disposals.
Potential increase in landlord licensing requirements at the local level.
Council tax band adjustments for rental properties.
Updates to Inheritance Tax (IHT) rules affecting rental property passed to heirs.
It’s important for landlords to stay informed by checking GOV.UK and consulting tax professionals regularly.
Summary
Making Tax Digital (MTD) for landlords earning over £50,000 will begin in April 2026 (reducing to £30,000 in 2027).
Capital Gains Tax (CGT) rates have been adjusted, and the tax-free allowance has been cut.
Rising interest rates make tax-efficient mortgage planning more important.
New landlord licensing schemes and council tax adjustments could impact costs.
Smart tax planning strategies, such as income splitting, timing expenses, and using company structures, can help minimize tax liabilities.
Managing tax obligations as a landlord requires staying ahead of tax law changes and planning strategically. Whether you own a single rental property or a portfolio, filing the SA105 form correctly and using tax-efficient strategies can save you money and prevent compliance issues.
For landlords needing professional assistance, consulting with a qualified accountant or tax advisor can ensure compliance with HMRC while maximizing deductions and reliefs.
To stay updated with future tax changes, visit the official HMRC Self-Assessment page.
This concludes our comprehensive guide on the SA105 form. By following these best practices, you can ensure smooth tax reporting, reduce liabilities, and avoid costly penalties.
How a Tax Accountant Can Help You with Form SA105
When it comes to handling tax affairs, especially concerning property income in the UK, the SA105 form becomes a crucial document. This is where the expertise of a tax accountant becomes invaluable. In this article, we will explore the various ways in which a tax accountant can assist you with the SA105 form.
Understanding the Complexities of Property Taxation:
Tax accountants are well-versed in the intricacies of UK tax laws, including those specific to property income. The SA105 form, being a supplementary document to the SA100 self-assessment tax return, requires a deep understanding of various tax implications related to property income. A tax accountant can help navigate through these complexities, ensuring that you are compliant with the latest tax regulations.
Determining Eligibility and Obligations:
Not everyone who earns income from property in the UK needs to fill out the SA105 form. A tax accountant can help determine if your circumstances require you to complete this form based on your total income and the type of property income you receive. They can also guide you on various thresholds and exemptions, such as the property allowance, which can significantly impact your tax obligations.
Maximizing Allowable Deductions:
One of the key areas where a tax accountant can be particularly helpful is in identifying and maximizing the allowable deductions on your property income. These may include mortgage interest, maintenance costs, insurance, and agent fees, among others. Accountants can ensure that you claim all permissible expenses, reducing your taxable income and, consequently, your tax liability.
Avoiding Common Pitfalls and Errors:
Filling out the SA105 form can be fraught with potential pitfalls, such as incorrect reporting of income or overlooking eligible expenses. Tax accountants, with their expertise, can help avoid these common errors, ensuring that the form is accurately completed. This not only helps in avoiding penalties from HMRC but also ensures that you are not paying more tax than necessary.
Keeping Up with Legislative Changes:
Tax laws and regulations in the UK are subject to change. A tax accountant stays updated on these changes, including any alterations to the way property income is taxed or reported. This knowledge is crucial, especially when it comes to filling out forms like the SA105, as it ensures compliance with the most current laws.
Assistance with Record-Keeping and Documentation:
Effective record-keeping is vital when it comes to tax returns. A tax accountant can assist in setting up and maintaining a robust system for recording all your property-related income and expenses. This organized approach is essential for hassle-free tax filing and can be beneficial in case of any HMRC inquiries.
Expertise in Complex Scenarios:
If you have multiple properties, joint properties, or properties under different types of ownership structures, the process of filing taxes becomes more complex. Tax accountants are skilled in handling such complexities and can provide tailored advice and solutions that fit your specific circumstances.
Representation and Assistance in HMRC Inquiries:
In the event of an HMRC investigation or inquiry, having a tax accountant can be a significant advantage. They can represent you and handle all communication with HMRC, reducing the stress and time involved in dealing with tax authorities.
Tax Planning and Strategy:
Beyond just helping with the SA105 form, tax accountants can assist in broader tax planning strategies. They can provide advice on how to structure your property investments and transactions in a tax-efficient manner, potentially saving you significant amounts in the long term.
Peace of Mind:
Perhaps one of the most significant benefits of engaging a tax accountant is the peace of mind it brings. Knowing that a professional is handling your tax affairs can relieve the stress associated with tax compliance, allowing you to focus on other aspects of your property business or personal life.
Summary of the Most Important Points About SA105 Form
Form SA105 is a supplementary page for Self-Assessment tax returns, used to report UK property income to HMRC.
It is required for landlords, property owners, and individuals earning rental income, including furnished holiday lettings (FHL).
Rental income is taxable based on income tax bands, and allowable expenses can be deducted to reduce tax liability.
Allowable expenses include repairs, insurance, letting agent fees, mortgage interest relief, and service charges.
Capital improvements (e.g., extensions) cannot be deducted, but replacement of domestic items relief may apply.
Taxpayers can submit SA105 online via HMRC or tax software (recommended) or via paper by post (slower processing).
Errors, missing income declarations, or excessive deductions can trigger HMRC audits and penalties.
Losses from previous years can be carried forward to reduce future taxable profits.
Making Tax Digital (MTD) for landlords earning over £50,000 starts in April 2026, requiring quarterly digital reporting.
Proper tax planning, accurate record-keeping, and using tax-efficient strategies can help minimize tax liabilities and avoid fines.
Audio Summary of the Most Important Points About SA105 Form
FAQs
Q1. Can you submit an SA105 form without an SA100 form?
A. No, the SA105 form is a supplementary page and must be submitted alongside the SA100 Self-Assessment tax return.
Q2. Can you claim mortgage repayments as an expense on SA105?
A. No, only the mortgage interest can be claimed, and even that is subject to basic rate tax relief (20%), not full deduction.
Q3. How do you report rental income from overseas property on SA105?
A. You cannot use SA105 for overseas rental income; instead, you must use the SA106 form (Foreign Income Supplementary Pages).
Q4. What happens if you make a mistake on your SA105 form after submission?
A. You can amend your tax return online through HMRC’s Self-Assessment portal or submit a corrected paper return until 31 January 2026 for the 2023-24 tax year.
Q5. Can you submit an SA105 form using third-party tax software?
A. Yes, HMRC allows the submission of SA105 through approved third-party tax software such as TaxCalc, GoSimpleTax, and Xero.
Q6. How does HMRC verify the information submitted on SA105?
A. HMRC uses rental property data, bank records, and letting agent reports to cross-check declared rental income and may request further documentation if discrepancies are found.
Q7. Do you need to submit an SA105 form if your rental income is below the tax-free allowance?
A. If your total property income is below £1,000, you do not need to submit SA105 due to the Property Income Allowance unless requested by HMRC.
Q8. Can you carry forward rental losses reported on SA105?
A. Yes, rental losses can be carried forward indefinitely and offset against future rental profits, but they cannot be used against other types of income.
Q9. Is SA105 required for Airbnb or short-term holiday lets?
A. Yes, but if your property qualifies as a Furnished Holiday Letting (FHL), you may also need to declare it under the FHL rules for additional tax benefits.
Q10. What expenses are not allowed on SA105?
A. Capital improvements, mortgage repayments, your own time managing the property, and personal travel expenses unrelated to property business are not deductible.
Q11. What is the penalty for failing to submit SA105 on time?
A. A £100 fixed penalty applies if late, followed by £10 daily fines after 3 months, and up to 5% of tax due for prolonged delays.
Q12. Can you submit an SA105 form if you receive rental income as part of a partnership?
A. No, property partnerships must report rental income on an SA800 Partnership Tax Return instead of SA105.
Q13. How do you report rental income if the property is jointly owned?
A. Each owner must submit an SA105 form separately, declaring only their share of the income and expenses based on the ownership percentage.
Q14. Can you claim council tax and utility bills as expenses on SA105?
A. Yes, but only if you (the landlord) pay them instead of the tenant. If the tenant pays, they cannot be deducted.
Q15. What should you do if you forget to include rental income on SA105?
A. You should amend your tax return as soon as possible through the HMRC portal or by sending a corrected paper return.
Q16. Can non-residents submit an SA105 form for UK rental income?
A. Yes, non-UK residents must declare rental income using SA105 but may also need to register for the Non-Resident Landlord (NRL) Scheme.
Q17. How do you report rental income received in cash on SA105?
A. Cash rental income must still be reported in Box 5 of SA105 as taxable income, and proper records should be kept for HMRC audits.
Q18. Do you need to submit SA105 if your rental income is fully covered by expenses?
A. Yes, even if you make zero profit or a loss, you must submit SA105 to record the loss, which can be carried forward to future years.
Q19. Can you submit multiple SA105 forms if you have different types of rental income?
A. No, all UK property rental income must be combined on a single SA105 form, but separate calculations for different properties should be kept.
Q20. Does SA105 apply to commercial property rentals?
A. SA105 is for residential property rentals only; commercial property rentals should be reported under business or corporate tax rules depending on ownership structure.
Disclaimer:
The information provided in our articles is for general informational purposes only and is not intended as professional advice. While we strive to keep the information up-to-date and correct, Pro Tax Accountant makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained in the articles for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
We encourage all readers to consult with a qualified professional before making any decisions based on the information provided. The tax and accounting rules in the UK are subject to change and can vary depending on individual circumstances. Therefore, Pro Tax Accountant cannot be held liable for any errors, omissions, or inaccuracies published. The firm is not responsible for any losses, injuries, or damages arising from the display or use of this information.