Here are a few reasons how a specialised landlords accountants can help:
1. Real time financial information
When looking for an accountant make sure they offer the use of cloud accounting software such as Quickbooks, FreeAgent, Sage One or Xero. Using these programmes will mean you have access to your business’s finances in realtime meaning you’ll always be able to see your current expenditure and profits. Making decisions for your business will then become smarter when you have the correct info at your fingertips. It also means your accountant will have access to this info too and can give you advice accordingly.
2. Help with Capital Gains Tax
Sales of properties other than your main residence are subject to Capital Gains Tax and need to be declared on your tax returns. An accountant can help you plan for this event. They will also remind you to record how much stamp duty was paid on the purchase of property as it is an allowable expense when calculating your Capital Gains Tax.
As a landlord, there are many tax savings and breaks that are open to you and a specialist accountant will know exactly what these are. For example you are eligible for tax breaks if you work from home at all. You can claim back for your driving mileage. Any money you spend on property management and advertising are both expenses that qualify for tax relief. A good specialist accountant should know every way to take advantage of all tax relief available to you. Even money spent on accountancy fees qualifies for tax relief.
4. Specialist knowledge and peace of mind
Hiring a landlords accountant will help you keep on top of all HMRC’s new regulations and keep you compliant. They will make sure you declare all the correct income – even if you didn’t make a profit on a rental property you still need to declare it. If you don’t declare correctly you could end up paying new penalties for non-declaration of income that would see your tax bill double! An accountant will take the hassle and worry out of doing your self-assessment tax returns and ensure it is in by the deadline.
5. Keeping your house in order
If you have multiple properties there will be a huge amount to keep track of – maintenance, improvements, deposits, rental payments to name but a few. If you don’t keep on top of it, how will you know how your business is doing? You need to have an accurate record of your income and out goings. An accountant should be able to advise you on the best way to collect and keep your information in order to maintain orderly records, for instance that you need to keep records of your rental business for six years after the tax year they’re for, in case HMRC need to see them.
6. Help on demand
A buy-to-let property business is like any other business. At some point you may want to expand e.g. buy more properties. And any business owner needs good advisers. If you have your own decent specialist accountant they will always be there to give you expert support and advice whenever you want it – helping you to make the right decisions for you and your business.