Submissions due for Annual Tax on Enveloped Dwellings (ATED)

Entities who own properties that are subject to the ATED charge must file their annual ATED return by 30 April 2023, to cover the period from 1 April 2023 to 31 March 2024.

Relief from the charge may be available; however, a return still needs to be submitted to HMRC (HM Revenue and Customs) to claim it. Here is our guide to ATED to help you meet your filing obligations.

When does ATED apply?

This tax was first introduced on 1 April 2013 and broadly applies to companies, partnerships with a corporate partner, and collective investment schemes that own an interest in a UK dwelling worth more than £500,000.

A property is defined as a dwelling if all or part of it is, or could be, used as a residence. This also includes gardens, grounds, or other buildings within them. This is most likely to be a house, flat or apartment.

Properties not classed as dwellings include hospitals, guesthouses, hospitals, and care homes to name a few. Charitable organisations and public bodies may be exempt from paying some or all of the ATED charge.

In counties such as Devon and Somerset, where tourism brings in lots of revenue for the region, ATED may affect people who own holiday letting properties in the South West within a limited company, for example.

Exemptions and Relief

Tax reliefs and exemptions are available in some cases when it comes to ATED. This may mean you do not need to pay the ATED charge on your property, or it may reduce the amount of the charge that you need to pay. However, any reliefs are not automatically granted. You will still need to file a return by the filing deadline to claim them.

If the company’s property falls within the ATED regime but qualifies for relief, you need to submit an ATED Relief Declaration Return. Examples of reliefs and exemptions include where the property is being developed for resale by a property developer, is being let on a commercial basis to an unconnected tenant, used by the public for at least 28 days per year or being used for charitable purposes. You can find out which reliefs and exemptions are available for Annual Tax on Enveloped Dwellings (ATED) in their entirety by visiting the government’s website.

The filing deadline

Unlike most UK taxes, returns are filed and any tax payments due are made at the start of the period rather than retrospectively.

The current ATED returns for the period from 1 April 2023 to 31 March 2024 are now available online and must be completed and filed with HMRC by 30 April 2023. To do so you need to be set up with the HMRC for ATED as this differs from the general HMRC accounts for businesses.  The ATED tax charge also needs to be paid by 30 April 2023.

Penalties will apply for those who do not submit their ATED form to HMRC on time, and companies may also be charged interest on any overdue tax payment.

It is also important to note that a full ATED return needs to be submitted to HMRC within 30 days of a company’s acquisition of a residential property for more than £500,000. A higher rate of 15% Stamp Duty Land Tax (SDLT) may also apply to such purchases.

We’re here

The deadline to submit your ATED return is looming. If you do not act now, then you could face penalties and interest if you do not submit your return or pay on time.

We are here to help. If you are unclear about any part of the process, whether your property is subject to the charge or if you qualify for any reliefs, we can offer help and advice. We can also help you in putting together your ATED return to ensure it is done correctly, efficiently and submitted on time. Contact me or get in touch with a member of our experienced tax team today.