Non-resident landlords – accounts to support UK corporation tax returns

Since 6 April 2020, non-resident companies in receipt of UK rental income (NRLs) are chargeable to UK Corporation tax rather than Income tax.

An annual Corporation Tax return needs to be filed for the period to which the company’s accounts are made up.

Accounts to support a corporation tax return

UK law requires businesses to submit accounts to support their Corporation Tax return when filing it online alongside the tax computation for the period and HMRC has recently updated its guidance on the accounts information that is required by companies that are non-resident landlords – see flowchart below.

UK corporation tax returns and computations must be filed using Inline eXtensible Business Reporting Language (iXBRL). Whether or not the supporting accounts must also be filed in iXBRL format will depend on your circumstances and what accounts are prepared covering the UK property business. The flowchart below sets out when iXBRL tagged accounts re required.

If your business has not previously prepared accounts, you may not need to do so to make valid UK tax returns but a profit and loss account statement will need to be prepared, electronically tagged for iXBRL format and submitted with your return.

If you prepare accounts that meet UK standards (UK GAAP or IFRS), these will need to be electronically tagged so that individual line items can be automatically uploaded to HMRC’s systems when they are filed. If your accounts do not meet UK standards, they may still be filed in some circumstances but it will be necessary to convert the figures reported in them to UK standards for inclusion in the Corporation Tax return.

BDO can offer a range of accounts preparation and iXBRL tagging services to help you fulfil your UK reporting obligations. Please get in touch with our team for help and advice on your UK reporting obligations, contact Andy Huddleston, Marios Gregori or Steven Dowers.