Accounting Questions

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Accounting Questions

    Hello,

    First post here but have been a reader for a while, I have placed it in the "tax" board as I feel it is the closed match, but I fear it is more of an accounting question. I hope that's OK.

    I am away to rent out a couple of residential properties and am seeking a little clarification on the best accounting practice for this; I have rented out property before but am a little out of date so now doing my research in obligations etc. I am in the process of appointing an accountant and letting agent, but intend to do my own bookkeeping under advice. Despite this, I do like to have at least a basic understanding of how things work in my own mind so I don't go into discussions totally blind, anyway - to get to the point...

    When organising an accounting scheme in which ever software does one need to account for the income and expenses from each property separately, or can they all be combined together in one? I realise it might be good to do it separately to see how each individual property is doing, but from a more official HMRC/accounting point of view, which is best/required?

    Similarly, when recording allowable/unallowable expenses, are these best recorded under each heading for ease of calculation, or can the all just be under general expenses?

    Any guidance gratefully received.

    Thanks

    #2
    I assume you're doing this as an individual rather than a limited company or LLP etc? If so, you will need to decide whether to use the Cash Basis or Accrual Basis - if the former is an option.

    My "default" position is now leaning towards company - but it does all depend on the investor(s) precise circumstances.

    Normally, all UK properties are treated as a single business - unless not let at a commercial rent etc. One of the main problems is likely to be distinguishing between revenue and capital expenditure - only the former is deductible from rental income.

    The more classification the better, IMHO. They can be amalgamated later for the Tax Return.

    A Balance Sheet can be very useful to track mortgages and capital expenditure - the latter might not be needed for many years (one of my clients had over 20 years to deal with for CGT purposes).

    Comment


      #3
      Thanks very much for the clarifications and insight.

      Sorry, forgot to mention that it would indeed be on an individual basis - no LLP, LTD etc.

      Comment

      Latest Activity

      Collapse

      • New to Renting out my property - Some tax questions
        by mucker973
        Hi All,
        I have a property I used to manage myself. The tenant paid me directly and I never declared it with the taxman. Going forward I have decided to use a letting agent to manage all of this. I currently reside abroad and when filling in the forms there is question which essentially is asking...
        24-06-2022, 07:39 AM
      • Reply to New to Renting out my property - Some tax questions
        by DoricPixie
        Your tax situation in Australian depends on whether you’re a permanent resident/citizen or a temporary resident. If you’re a temporary resident you find yourself in tax sweet spot where HMRC doesn’t care about your Australian income and assets and the ATO doesn’t care about your UK income and...
        24-06-2022, 14:29 PM
      • Reply to New to Renting out my property - Some tax questions
        by Gordon999
        If you are living overseas, you must register as a non-resident landlord using NRL1 form to Tax Office if you receive rental income from a UK property. If you don't register , the letting agent is required to deduct 25% tax on any rental money paid to you.

        After being registered...
        24-06-2022, 09:31 AM
      • Reply to New to Renting out my property - Some tax questions
        by jpkeates
        https://www.gov.uk/government/public...g-a-disclosure

        There's a "not quite an amnesty" operating at the moment.
        24-06-2022, 09:02 AM
      • Reply to New to Renting out my property - Some tax questions
        by mucker973
        Thanks JPkeates, I knew you'd know!

        I've been thinking of reporting it for a while. If I declare these past "earnings" do you think I'll just have to pay the tax (if there is any) or do you think there will be any penalties? Penalties are usually applied when you are caught out...
        24-06-2022, 08:47 AM
      • Reply to New to Renting out my property - Some tax questions
        by jpkeates
        I don't know what the situation is with Australian tax on UK rented property, and you'd probably better enquire locally.

        There are two different things to address.
        If you've been receiving income and not declaring it, you need to own up and pay what you owe - which sounds like nothing...
        24-06-2022, 08:32 AM
      • Reply to New to Renting out my property - Some tax questions
        by Covent Garden Girl
        Your questions are more complicated than you imagine.

        1) Yes, firstly as a non resident landlord, the agent or indeed tenants have to deduct tax at source, or you have to send off a form, but also wait for HMRC to send confirmation that they think it is okay for you not to have the tax...
        24-06-2022, 08:17 AM
      • Reply to Are utility bills tax-deductible?
        by jpkeates
        Even if you don’t need a licence, managing an HMO can be quite onerous. You’ll need a fire risk assessment, and then to comply with its requirements as a first step.

        That usually means fire retardant doors, different door locks, hard wired fire and smoke and heat alarms for a start....
        24-06-2022, 07:08 AM
      • Are utility bills tax-deductible?
        by Bigpat
        I've had a buy-to-let on a standard Assured Shorthold Tenancy for a few years and my tax return has been pretty simple. But since last year I have also had two lodgers, staying with me at my own residential property. Now I have purchased a small additional property, which I have moved into myself and...
        21-06-2022, 14:26 PM
      • Reply to Are utility bills tax-deductible?
        by Bigpat
        Thanks. Yes I checked the local authority who said that only "large" HMOs have to be licensed, and that counts as 5 or more tenants.

        I had no idea that separate TV licences would be required. How do HMO landlords usually handle this?
        (a) should I purchase three additional...
        23-06-2022, 21:38 PM
      Working...
      X