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Get on Top Of Your Tax Return

I love taxRecently I watched in horror as my mother in law was trying to work out what income and expenses she has had over the last few years on a property which she jointly owns but has been renting out. Hearing tales of her requesting 9 years worth of bank statements and scratching around in the loft sorting through boxes full of unsorted paperwork desperately seeking old tax returns left me shrugging my shoulders in dis-belief.


Over the last few years I’ve developed a pretty easy and efficient system for documenting all the data I need to complete my tax return each year. My aim is to make the process of filling in my HMRC Self Assessment Tax Return as pain free as possible. By following the system below, when I sit down to complete my return each year it takes roughly 20 minutes from start to end.

My Self Assessment System

  1. Paperwork: For each tax year I simply use one plastic folder and assemble all of the key statements/documents I need to make my return throughout the year.
  2. Spreadsheet: This details all of the income/expenses related to my rental properties as well as other information required to complete the self assessment is logged on a single Excel spreadsheet.

Lets take a closer look….

The Paperwork

At the start of each tax I start a new folder labelled with the tax year. As any relevant paperwork hits the doormat throughout the year it immediately get placed inside the folder. Here’s a few examples of what is inside:

  • Any letters from the Inland Revenue detailing my tax code
  • P60 tax statement from my employer (details my earnings and PAYE tax paid throughout the year)
  • P11D tax statement from my employer (details any additional benefit/expenses related to my employment)
  • Mortgage interest statements for all my buy to let mortgages1
  • Savings interest statements for all bank accounts2
  • An A5 envelope for any buy to let receipts/invoices paid
  • Dividend certificates from any taxable investment accounts

 The Hardest Thing in the World to Understand is Income Taxes
                                                                                     Albert Enstein, 1963

The Spreadsheet

You can download an example of my spreadsheet here.

1. Property Income & Expenses. The main bulk of the spreadsheet is used to track all of the income and expenses generated from my property investments. If you’re a landlord you will know that there are lots of expenses related to being a landlord. While nobody likes expenses, they do reduce your tax bill so it is vital to log them all and maximise any tax savings.

To simplify this process, and ensure I miss nothing I use one bank account solely for the purpose of my buy to let properties. Any rental income, repair expenses, insurances, agency fees, ground rents, travel expenses etc are put through this bank account. The account is never used for any non property related transactions meaning the account statements provide a full record of all of my property transactions.

Every 2-3 months or so I simply download all of the entries from this bank account into the excel sheet (the ‘BTL Cash Flows tab). The first three columns are pasted in directly from my online banking screen.

Next I simply populate columns D:H:

  • Column D. A brief summary of the item in case I need to reference the invoice/receipts
  • Column E. Which property the item relates to
  • Column F. Category (Expense or Rent)
  • Column G. This is the HMRC category used on the self assessment form. This one saves a lot of time later on!
  • Column H. The tax year. No need for additional sheets each year thanks to this column.

The final two columns (I:J) are simple concatenations that enable me to sum the data in a useful way when it comes to the return sheet.

As is the case with all of my financial spreadsheets they are religiously backed up, both to an external hard drive and into the cloud.


2. Everything else. Finally I create a new tab for each tax year (e.g. “2013/14 return”).

First under the ‘Property’section I use a couple of ‘sumif’ formulae to add up my property income, then expenses (cells C15:C19) in the categories required by the HMRC  self assessment form online.

In cells C8:C10 I input the mortgage interest amount for each property using the certificates the mortgage company sent me.

Tax Return XLS

Finally on the right hand sections I log any other relevant information that I will need to complete my return. Examples include:

  • Details of all (taxable) dividends received outside of my ISAs/NISAs3
  • List of all charitable donations4
  • Details of all pension contributions made
  • Details of any capital gains/losses

Once this summary page is completed, I have all of the information I need to complete my tax return. It’s time to head to the HMRC website.


Having a simple system like this enables me gather/file the required information needed for completing my self assessment tax return each year with very little effort.

Once I have all of the data either in the plastic folder or in my spreadsheet the actual return usually takes me well under 20 minutes to compete from start to finish. Not only that but I have all of the relevant information filed such that I can access any of it quickly and easily if required.

Why so many people pay north of £200 for an accountant to do this work is beyond me.

In fact my mother in law pays approximately £350 for someone else to do the dirty work and she is still unable to determine what her income/expenses were relating to her property 2 years ago!

Do you have any tax return tips?


1I call round the mortgage companies on the 6th April each year to order these
2Again I call to order these on the 6th April each year
3I already have this data logged on my ISA portfolio spreadsheet
4If you donate via JustGiving you can log into your account and download your donation history for the year 😉

{ 11 comments… add one }
  • Marco May 13, 2014, 4:51 pm

    I do things similar to you. I always end up filing my tax return within a few months of the new tax year.

    I’m not that good at keeping paper documents so I take a photograph of all documents on my Iphone and upload them onto Dropbox where I can organise them into folders.

    • Under The Money Tree May 14, 2014, 9:04 am

      @Marco – I also use Dropbox quite heavily. Most invoices/bills are dealt with online now so I usually pdf any invoices and throw them into Dropbox for archiving. This also cuts down the amount of paperwork I need to store unnecessarily for years on end.

  • Marco May 13, 2014, 4:53 pm

    A friend of mine used to file their own tax return and the HMRC told them to get an accountant do it as people often underestimate how much tax is owed.

    Her accounts were slightly complex compare to most people but probably similar to yours and mine.

  • Al May 13, 2014, 5:30 pm

    One gotcha I was unaware of is for the taxable dividends section… even if you are in accumulation funds you need to declare the dividends you *would* have received if they weren’t ploughed back in to the fund. Just thought I would mention it!

    • Under The Money Tree May 14, 2014, 9:01 am

      @Al – A lot of people miss this one and suspect under pay their taxes. Thanks for raising it.

  • BeatTheSeasons May 14, 2014, 8:44 am

    I was actually considering hiring an accountant to help me because of a) the complexity and b) the fact that they may be able to give me advice that more than pays for their fee. Of course you would be talking about a ‘proper’ tax accountant, not just someone who processes and files paperwork.

    On the complexity front, I purchased a property this year which I part-financed via additional borrowing against my own home. I’m pretty sure I can claim a portion of the mortgage interest but it’s quite hard to calculate on a repayment mortgage. How about the remortgage fee, is that also allowable against the rental income? Then there is stuff like installing central heating where it was partly an upgrade (i.e capital) and partly just replacement. A good accountant would know how to deal with all these issues.

    Moving onto the advice side, there are so many long-term tax issues to think about and again paying for advice could be far more lucrative than going the DIY route. Did you know that CGT is only paid by the person holding the beneficial interest in the property for example? This was a fundamental point for us where one property is held in one person’s sole name. Then looking ahead you have use of trusts for inheritance planning and passing on family wealth, and all manner of other possibilities.

    • Under The Money Tree May 14, 2014, 9:13 am

      @BeatTheSeasons – With your situation I would suggest either a very thorough/careful read of the HMRC website or indeed some professional advice.

      However be sure to pick your accountant/advisor carefully as not all accountants are experts in property taxes. A friend of mine recently had to pay a massive tax bill to HMRC after receiving some very bad advice relating to property held in a trust for several years. The accountant was from a ‘well respected’ medium sized, regional firm (not some local one man band or internet shop). He’s now suing the accountant to try and reclaim the money and generally having a lot of stress/expense thanks to the advice he was given.

      Even if you get advice I thoroughly recommend doing your own research and questioning any uncertainties. Also You can call HMRC to seek clarifications on any of the rules on their website. I’ve used this service a few times and it seems to work pretty well.

  • Andy May 18, 2014, 6:47 pm

    Well this should be obvious, but obviously for many people it isn’t. Record all the figures during the year, and then fill them into your tax form when you get it.

    The only reason that I haven’t done my tax return for this year is that I am still waiting for tax certificates from financial institutions. I’m really unable to understand why this isn’t available more than a month after the end of the tax year.

    • Under The Money Tree May 18, 2014, 7:38 pm

      Obvious it may be Andy, but many people (including myself until about 4 years ago) don’t do it!

      It amazes me that financial institutions (banks, mortgage providers) don’t send out tax certificates as standard procedure on the 6th April each year.

  • Monevator May 24, 2014, 9:08 am

    Maybe I’m missing something, but how are you getting taxable dividends from Facebook and Twitter when they don’t pay dividends? Is that short-hand for something else?

    Just curious!

    • Under The Money Tree May 24, 2014, 9:19 am

      Aah, you obviously didn’t see the comments on those two cells in the spreadsheet 😉
      Stocks like Facebook and Twitter definitely don’t form part of this money tree!

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