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Article:

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

11 May 2020

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

This means that NRLs will need to complete an Income tax return to report the proportion of income arising to 5 April 2020. A Corporation Tax return will need to be filed for the period commencing 6 April 2020 and annually thereafter 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.

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 will now need to do so to make valid UK tax returns. 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 HuddlestonMarios Gregori or Steven Dowers.