How to Pay Annual Tax on Enveloped Dwellings

If your company or partnership owns residential property worth more than £500,000, you need to know how to pay Annual Tax on Enveloped Dwellings (ATED) correctly and on time. Payment is usually due by 30 April during the chargeable period, and late payments can result in penalties and interest charges.

When You Must Pay

The ATED payment deadline is normally 30 April within the chargeable period. This means that for most cases, you need to pay by 30 April after the start of the tax year the charge applies to.

In some situations, the filing date for your return falls after 30 April in the chargeable period. When this happens, the payment date moves to that later filing date instead.

If the deadline falls on a weekend or bank holiday, you must make sure your payment reaches HMRC by the end of the previous working day.

You must submit your ATED return and pay any tax due by the same deadline.

What You Need Before You Pay

Before making a payment, you'll need your 14-character reference number that starts with the letter X.

You can find this reference number on the letter or email HMRC sent you after receiving your ATED return or summary.

Using the correct reference number is important. If you use an incorrect reference, there will be a delay in HMRC allocating your payment correctly to your account.

How to Pay Online

The quickest way to pay is online through your bank account. You can approve a payment directly through your online or mobile banking account by selecting the 'pay by bank account' option when you use HMRC's payment service.

You'll be directed to sign in to your online or mobile banking to approve the payment, so you'll need to have your online banking details to hand.

Payments made this way are usually instant, though they can take up to 2 hours to show in your bank account.

Paying by Bank Transfer

You can pay ATED by bank transfer using CHAPS (Clearing House Automated Payment System), Faster Payments, or Bacs (Bankers Automated Clearing System).

If your account is in the UK, use these details:

• Sort code: 08 32 10
• Account number: 12001020
• Account name: HMRC Shipley

If your account is overseas, use these details:

• Account number (IBAN): GB03 BARC 2011 4783 9776 92
• Business Identifier Code (BIC): BARCGB22
• Account name: HMRC Shipley

You must make all payments in pound sterling. Your bank may charge you if you use any other currency.

If your bank needs it, HMRC's banking address is: Barclays Bank plc, 1 Churchill Place, London, United Kingdom, E14 5HP.

Bank Transfer Timings

The time it takes for your payment to reach HMRC depends on the method you use:

• CHAPS or Faster Payments: Payment received on the same or next working day
• Bacs: Allow 3 working days for the payment to reach HMRC

Check your bank's processing times and maximum transaction limits before you pay to make sure your payment arrives on time.

Paying by Cheque

If you prefer to pay by cheque, allow 3 working days for your payment to reach HMRC.

Make your cheque payable to 'HM Revenue and Customs only' and write your 14-character reference number on the back.

If you're sending a cheque for more than one property, list each dwelling and note the payment reference against each amount.

Do not fold the cheque or attach it to other papers. You can include a letter if you'd like to request a receipt.

Send your cheque to:

HM Revenue and Customs

Direct

BX5 5BD

What Happens If You Pay Late

If you do not pay ATED by the deadline, you may need to pay:

• A penalty
• Interest on the unpaid tax
• Or both

HMRC will calculate penalties and interest on late payments according to their standard penalty rules for late payment.

The penalties and interest will continue to accrue until you pay the tax you owe in full.

Declaring Gains on Corporation Tax

You must also declare any gains on your company's Corporation Tax return. If you do not already submit a Corporation Tax return, you must register your non-resident company for Corporation Tax.

Sources

• Pay annual tax on enveloped dwellings
• Compliance checks: penalties for failure to file returns on time — Income Tax, Capital Gains Tax and Annual Tax on Enveloped Dwellings — CC/FS18a

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.