Property investors with several sources of income are at growing risk of tax problems, according to The Accountancy Partnership.
Lauren Harvey, accounts manager at The Accountancy Partnership, said many landlords juggling rents, freelance work and other side incomes are failing to keep adequate records or submit accurate tax returns.
She said: “Property investors are wearing many hats; one day working for a client, the next day buying equipment needed to do the job.
“However, HMRC doesn’t care how many streams you have; all they care about is that you declare them properly and on time.”
She highlighted recurring issues that frequently trip up landlords, such as under-reporting small but taxable sums, misunderstanding what expenses can legitimately be offset, and not budgeting for their eventual tax bill.
Harvey said multiple income streams can also make it harder to predict liabilities, leaving some investors unable to pay when deadlines arrive.
The growing complexity of landlord finances comes as HMRC steps up its digital compliance efforts and increases the use of data-matching to identify undeclared earnings.
Harvey added: “All income must be declared on your Self Assessment tax return, even if you’re also in full-time employment and taxed through PAYE.”
With the next self-assessment deadline approaching in January, Harvey urged landlords to keep thorough records and consider professional help to avoid fines.
She concluded: “HMRC don’t always make things easy, and when your income comes from more than one source, the calculations can get quite complex,”
