What is ATED and Who Needs to Pay It? (Quick Guide)

JAFA Accountancy
Apr 26
2 min read

Toy wooden house on a table with stacks of coins blurred in the background, against a sunlit green and yellow backdrop.

If your company owns UK residential property worth over £500,000, there’s a tax deadline you can’t afford to miss. The Annual Tax on Enveloped Dwellings (ATED) return is due by 30 April - even if no tax is owed. Here’s what you need to know to stay compliant and avoid penalties.

Key Takeaways

ATED applies to UK residential properties over £500,000 held by companies, corporate partnerships, or investment schemes.
A return must be filed every year, even if no tax is due as missing it can lead to ATED penalties.
ATED reliefs are available for certain property uses, but you still need to submit a Relief Declaration to claim them.

What is ATED?

ATED stands for Annual Tax on Enveloped Dwellings. It’s a yearly tax you may need to pay if your company owns a UK residential property worth more than £500,000.

It’s called “enveloped” because the property is owned through a business structure, not by an individual.

When Do You Need to Deal With It?

If you own a qualifying property on 1 April, you need to file a return by the ATED payment deadline of 30 April, even if no tax is due.

If you buy a new property later in the year, you usually have 30 days to file.

If it’s a new build, you may have up to 90 days, depending on when it becomes a dwelling.

Who Needs to File and Pay?

If your company owns a UK residential property worth more than £500,000, you probably need to file an ATED return, even if you don’t owe any tax.

You must file if the property is owned by:

A limited company
A partnership with a company as a member
A collective investment scheme

What If I Don’t Owe Tax?

Even if you qualify for relief (like renting it out or using it for employees), you still need to file a Relief Declaration Return. HMRC won’t assume you’re exempt - you have to tell them.

You could face penalties and interest, even if no tax is due. HMRC still expects the paperwork.

What We Think

ATED rules can feel unfamiliar if you’re not used to owning property through a company. It’s not about the amount of tax due - it’s about knowing when you need to file.

According to us, the key challenge is awareness. Many business owners are focused on day-to-day operations and may not realise that a property held in a company structure brings extra reporting requirements.

Understanding these rules early can help avoid last-minute stress or penalties, especially when your company doesn’t owe any tax but still needs to file.

How JAFA Can Help

At JAFA, we help you stay ahead of the deadlines and avoid surprises. Whether you're dealing with ATED for the first time or just unsure if it applies to your company, we’ll guide you through the process step by step.

We’ll: