The deadline for 2022/23 ATED compliance is approaching
01/03/2022
For companies that hold residential property with a market value of more than £500,000, the Annual Tax on Enveloped Dwellings (ATED) deadline is approaching. ATED returns or relief declaration returns for 2022/23 should be submitted between 1 April 2022 and 30 April 2022 with any tax due paid on, or before, 30 April 2022.
What is the ATED?
ATED came into force on 1 April 2013 as part of the 2013 Finance Act to deter the holding of high value residential properties within a corporate structure. When first introduced it included properties worth over £2 million owned by either companies or corporate partnerships.
This was expanded in 2015, to properties worth over £1 million and then again in 2016 to include properties worth more than £500,000.
Unlike other UK tax regimes, the ‘tax year’ for ATED runs from 1 April to 31 March and requires returns to be submitted at the start of the annual period. Failure to submit can result in interest charges and penalties.
How much is the return charge?
The tax charge cost is based on the property’s value. For 2022/23 the amount ranges from £3,800 up to a maximum of £244,750 across the six bands detailed below.
| Property Value | Annual Charge |
| £500,000 up to £1 million | £3,800 |
| £1 million up to £2 million | £7,700 |
| £2 million up to £5 million | £26,050 |
| £5 million up to £10 million | £60,900 |
| £10 million up to £20 million | £122,250 |
| £20 million+ | £244,750 |
Specific Point for 1 April 2022 regarding valuation of property
For this reporting period, the value is determined by the market value of the property as at 1 April 2022, or its original cost if acquired after this date. This means all properties must be revalued by 1 April 2022 and this value is the one which will be used for a specific property for the next 5 years.
The revaluation can be done either by a professional, or it can be a self-valuation with sufficient back-up. Whilst a formal valuation is not strictly required, it is advisable to use a property professional to ensure that the figure is robust and reasonable. Please contact us today to talk about current property values.
Are there exemptions from the charge?
Property rental businesses, property dealers and property developers are exempt from the charge, which needs claiming through an annual “nil return” known as a relief declaration return. If a company does not submit this claim for relief in the correct amount of time, companies could receive penalties.
How do I file an ATED?
ATED returns or relief declaration returns should be submitted via HM Revenue and Customs ATED Online Service. The online system involves a registration process, which can be completed in advance of the deadline, however submissions can only be made within the April submission window. If necessary, as your accountant, we can file on behalf of your company.
For more information on related issues, please contact us today.
