If you own one or more houses or flats to rent out, whether it’s a buy to let property or owned wholly by yourself, keeping on track with your finances is necessary. With specific tax requirements placed on you as a landlord, from property tax to landlord tax, seeking expert advice for managing property finances in the UK can make a huge difference.
You may be wondering, do landlords registered in England need a specialist accountant? And what are your financial and tax requirements as a landlord?
Our professional accountants at WIS Accountancy are tax specialists with extensive experience as a team of accountants for landlords. We’ve covered all the advice you need to know below:
Do landlords need accountants?
As a landlord, do you need to hire a specialist accountant for tax advice and submission? While there’s no legal requirement for you to seek help on property tax, self-assessment tax or any other aspect of landlord finances, that doesn’t mean it isn’t a good idea. Being tax efficient may mean bringing in outside help.
Whether you’re investing in a buy to let property to rent for the first time or you’re a limited company or business landlord for dozens of houses across the country, the support of an expert account service can make a considerable amount of difference.
Accounting for a buy to let property
If you’re brand new to the world of rental possessions as a business or individual, working with a trained and qualified accountant for landlords is a good idea.
As the best way to ensure you’re meeting your property tax obligations, a trained landlord accountancy company can help handle all aspects of your property finances. This includes anything from creating landlord tax returns, providing insight into VAT, and managing communications with the tax office.
Financial guidance for multiple tenancies
It can be a challenge for limited companies and larger businesses under a trading name to handle dozens of moving parts and finances at once. The insight of qualified and trained property accountants can ensure your taxes are accurate and completed on time.
While you likely understand the ins and outs of taxes, outsourcing the facts and figures can help ensure your business or company continues to run on time with no potential property tax snags or forgotten finances.
Landlord accountants for multi-occupancy buildings
If you own a multi-occupancy property, more taxes and costs may apply than they would for single-occupancy buildings such as houses or individual flats. An experienced landlord accountancy service can ensure all additional fees are accounted for to provide accurate expenses on your yearly landlord tax return.
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What tax do you pay as a landlord?
As a landlord, there are several different financial factors you’ll need to consider with the ownership of multiple possessions. Here is a quick overview of the landlord taxes you’ll need to cover:
Landlord tax on rent and property income
As a self-employed person – in this case, a landlord – you’ll be required to pay income tax on any earnings you make on residential rentals to HMRC.
These costs include any profit that you receive directly from your tenants. Whether that’s the payment of rent, pay for communal services or compensation for utility bills.
When you take a deposit from a tenant, this also counts as income. In addition, any cash you retain for cleaning and repairs at the end of a tenancy is also included. As part of your income tax return, you’ll need to cover any relevant national insurance contributions too.
Contact or call our team of accountants for any free tax advice on services for our client’s limited company or business accounts.
Allowable expenses to reduce rental income tax
Much like any other self-assessment tax, the owners will be able to claim certain expenses against your rental properties. These expenses reduce your overall profit, which is reflected in the amount of landlord tax you’ll need to pay. Your limited company can claim a number of expenses such as council tax, accountant’s fees, maintenance, insurance, and repairs against your tax return, amongst other expenses.
Capital gains tax on property sales
If you sell a rental property, you’ll need to pay capital gains tax. This tax is applied to any property that is not your primary residence, whether it’s a holiday home or a buy to let property.
Currently, you’ll need to pay 18% or 28% of the profit of a property sale in capital gains tax, depending on your taxpayer level. Capital gains tax is an essential payment for all non-primary property sales.
What is property accounting?
Property accounting refers to a specific type of accounting for landlords and property management businesses. A property accountant has expertise in handling accounts and tax returns for landlords.
With the right accountancy services, you’re able to take advantage of the extra time and their specific knowledge to keep your finances on track and on time. Working with a qualified and registered property accounting business service is a good idea. Whether you are considering a buy to let property or you’re already an established landlord, money advice and services can help make the money and landlord tax process more efficient.
How does the tax man know about my rental income?
Some landlords may feel that they can avoid or reduce the costs involved in renting out properties if they are smart about it. But HMRC has multiple ways to find out exactly what your income on rented houses is, which may lead to problems in the long run for you or your business.
Some of the ways that the tax office can figure out you aren’t paying due tax include:
Examining stamp duty land tax records
If you own multiple properties outright or with buy to let, the SDTL will automatically inform HMRC that these additional houses or flats may not be reliefs for personal use.
Checking the HM land registry
All personal properties and land sold registered in England and Wales since 1993 is on the HM land registry. It takes seconds for the taxman to find number of information whether property owners have applied for private residence relief or not.
Talking to estate agents and property management companies
If your properties are handled by an estate agent or property management company service, they are obligated to follow specific regulations. This includes providing accurate information on rentals or be issued a significant fine.
Looking at tenants’ security deposit
All security deposits must be registered with a government-supported scheme in the UK, allowing HMRC to see records of tenancies quickly and easily if you’re paying tax.
Through the electoral register
If your tenants register to vote at a residential property that is not declared as a rental investment, this could indicate to the tax office that your property is being rented out when they haven’t received tax payment.
Need accountants for landlords? Contacts WIS Accountancy
If you’re renting out a house or any other kind of property in the UK, seeking professional help with your money, fees and taxes can ensure our clients are meeting their legal obligations. Our WIS Accountancy team has extensive experience in leading to optimising reliefs, provide advice and manage fixed residential monthly house rental income, using the latest software to support our clients for tax returns, tax advice, capital gains tax, and more.
From buy to let properties to multi-occupancy houses and buildings, we’re the best accounting service to get in touch with you in order to provide the right advice. If you’re a limited company in need of comprehensive landlord services including payroll, WIS Accountancy provides our clients support to deal with that service too.
Contact or call us on 0203 0111 898 and our professional team of accountants today. We can guide you and provide expert property accounting advice. This includes dealing with property taxes as a landlord, advising your limited company to manage tax returns on accounts, monthly rental income, payroll, investment, personal rental property and other monthly tax services.