Accounting Questions

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    Accounting Questions


    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a little clarification on the best accounting practice for this; I have rented out property before but am a little out of date so now doing my research in obligations etc.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.


    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).


      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.


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