We’ve had a busy, focused start to January 2021, getting tax returns completed for hundreds of landlords across the UK. Now, though, we’ve got time to respond to all the queries we got from rental property owners looking for a specialist accountant at the last minute before the deadline.
The conversation is often the same: they’ve had a frustrating experience in the past couple of months or suspect they’re paying too much tax and wonder if we can help.
Here’s what you ought to expect from an experienced, truly specialist property tax accountant.
1. They understand landlords
There’s no one-size-fits-all model when it comes to landlords and your accountant should understand that.
You might be what’s sometimes called an accidental landlord having acquired a rental property through inheritance or when you moved in with your partner. Or you could be someone who has acquired their third, fourth or fifth house or flat and is making a serious living out of letting property.
You might be living down the road from your property or thousands of miles away somewhere around the globe.
Some things you’ll have in common, such as the trials of dealing with tenants and letting agents. Other aspects of your setup will be unique.
For example, non-resident landlords have to submit tax returns differently to those based in the UK. And accidental landlords, especially new ones, might be unsure whether they need to pay tax at all.
As well as technical knowledge, it’s also about being on your side. We’re landlords ourselves and have a real enthusiasm for property which helps us genuinely connect with our clients – and give advice that goes beyond the obvious.
Most accountants probably have a few landlord clients so they know the bare basics. But owning a property is in most cases a long term investment. Things change, tax rules change, your circumstances change, you get married, you have children, your income increases, you want a plan for retirement and a plan for passing on your hard earned wealth. As property tax specialists, we keep ourselves fully up to date on tax changes, which means we keep you updated. We’re working with landlords at every stage of their property owning journey. From the first property acquisition to exiting or succession planning. Over the years, it all starts to mount up.
2. Business expenses
We’re boring when it comes to this kind of thing. We believe in taking the time to ask lots of questions – and to answer them. This often uncovers things our clients didn’t realise they could claim and, of course, prevents them putting in spurious claims they’ll later regret.
It’s about knowing the difference between repairs and ‘capital improvements’, for example – you can usually claim the former, but not the latter.
3. They’ll take time over details
A decent property tax accountant won’t be afraid to make work for themselves and will do the calculations needed to reduce your tax bill.
For example, if you manage your property business from a home office for a few days each month, you could be claiming a proportion of your household costs as a business expense. However, if you are in a situation where you have just one or two properties and use a letting agent, HMRC will most likely not accept any business use of home claims. Working out your claim does take a bit of thought and some calculations.
If your electricity bill is £100, what percentage of that is a business expense if you work two days a week from home, using one room of a six-bedroom house?
It’s only a few pounds but the point is, it’s your money, and all those small tax reliefs add up over the years and decades.
4. They’ll come to you with ideas
A landlord accountant doesn’t just record what’s happening – they make suggestions to shape your tax strategy.
For example, there might be tax advantages in changing the ownership of the property from you to your partner or spouse, or vice versa. If we spot something like this, we’ll always flag it and help you crunch the numbers to make a decision.
Equally, if you’ve come to us for help with undeclared rental income – it happens, quite innocently – we’ll propose a plan for disclosing it to HMRC with the best possible chance of avoiding the most severe penalties via the Let Property Campaign or a direct approach to HMRC.
5. Fast, accurate communications
Your accountant should respond to your queries quickly, in language you can understand. We know from talking to clients who’ve joined us in recent years that isn’t always the case, unfortunately.
This doesn’t just apply to property accountants, obviously, but having said that, it does help to understand how landlords operate.
And getting the information you need from your accountant shouldn’t lead to a surprise itemised bill.
When it comes to tax returns, they should be reminding you of the deadline with plenty of time to go and helping you get your return done as early as possible.
6. It should feel easy
This final point is about how working with your accountant makes you feel.
Look at our testimonials and you’ll see certain words cropping up time and again: prompt, professional, speedy, easy…
If you want a specialist property accountant to help with self-assessment in January 2022, get in touch now.