Review now to avoid £1,600 penalties: Annual Tax on Enveloped Dwellings

We’d like to bring to your attention potential tax filing obligations under the “Annual Tax on Enveloped Dwellings”, or ATED.  Failure to make even a “nil” return for ATED, including if you are a property development or property letting company, can mean that your company could be hit with late filing penalties of up to £1,600. The deadline for submitting ATED returns is fast approaching therefore it is important to start taking steps to review whether your company has any ATED compliance obligations as soon as possible.

As a company, if on 1 April 2018 you hold residential property as trading stock or as a capital asset, valued at more than £500,000, then you may need to submit a tax return to HMRC by 30 April 2018. Further filing deadlines may occur if you acquire or convert properties during the year.

An important update to the ATED regime is that all residential properties owned at 1 April 2018 must be valued as at 1 April 2017. This means that dwellings which were valued near the £500,000 threshold in earlier years may now be caught by the ATED regime and your company may be required to submit ATED returns. If there is a risk that the property is close to the £500,000 threshold or substantial works have been carried out on the property since it was last valued, it is important to take action now and value your property. The valuation does not have to be done by a professional e.g. a chartered surveyor or estate agent. However where the property value is expected to be close to £500,000 (or one of the other higher ATED bands) it may be advisable to obtain a professional valuation.

Our flow chart will help you to decide whether you may need to make an ATED return.

If you need to submit a return and wish to do this yourself, you can register with HMRC’s on-line service

If your company does not already have a Government Gateway account (it generally will do, for example if it has a PAYE scheme for instance), then you can create an account from the link.

If you would prefer us to complete the ATED return and submit it for you, our fees for 2018/19 returns are £275 plus VAT for existing clients. Additional fees may apply if more than one return is required.

If you would like further information, please contact us at