12 Nov 5 Reasons Why Property Landlords Need Accountants
Being a property landlord is one of the best ways to supplement your income. The buy-to-let investment scheme has allowed many people to build their pension and entrepreneurs to create a business cemented in property ownership. Just like any other investment, you’ll need sound financial advice to manage your assets properly. Take the help of a property landlords accountants to sort out your accounts.
Any old accountant won’t do the trick. You’ll need specialist landlord accountants in London who know the ins and outs of the property market while helping you keep your rental accounts in order. While you’re busy taking care of your investment, they’ll keep you apprised of significant developments, like if your enterprise is running at a profit or a loss or if you’re charging enough rent.
Here are five reasons you’ll why property landlords need accountants to enjoy the fruits of your property investments:
- You’ll Have Organised Rental Accounts
If you’ve created a business out of buying-to-let properties, then you’ll need orderly rental accounts to gauge the success of your investment. If you have multiple properties, then you’ll know why it’s easy to lose track of improvements you’ve made or any rental payment slips you’ve received. You need to know what you spend on your business each month, which is possible through a reliable accountant. They can help you compile such information and organise it into rental accounts, helping you keep a close eye on all your properties.
- You Can Access Crucial Financial Information
Many London accountants know how to take advantage of modern software to give you up-to-date information on your enterprise’s financial position. It’s crucial to have access to details all the time. You’ll know if you’re spending on the right things. You become certain and it’s easier to afford a higher rent or if you should cut back on costs that are eating up your profit. Your accountant can tell you about the financial health of your business, which is essential for you to know to make informed decisions.
Having an accountant by your side can help you identify opportunities to save, including tax relief. Landlord accountants know precisely the ways you can save on tax, such as your self-assessment tax bill. If you do your paperwork from your home, then you’re eligible to claim tax relief. Your accountant can help you prepare your self-assessment tax return, which is crucial to make the most out of your business.
- You’ll Stay Updated on Legislation Changes
As an entrepreneur, you focus heavily on the day-to-day operations of your business. You may not keep track of any legislation changes, which are likely to affect your investments. Fortunately, a property accountant is always up to date on the latest news in the industry. This allows them to make any changes that impact you. You won’t have to do the legwork in undertaking extensive research; your accountant can do all that for you and make sure you’re compliant.
- You’ll Have a Financial Professional on Call
Lastly, the most practical reason property landlords need accountants is that you have a financial professional to consult at any time. You can seek their guidance when you need to make critical business decisions, such as buying another property or determining the strength of your cash flow to fund a property renovation. They will give you impartial and personalized advice to take strategic decisions for your business.
Allowances for replacement of domestic items
If you let out the residential property (a dwelling house) you may be able to claim a deduction for the cost of replacing domestic items such as:
- movable furniture for example beds, free-standing wardrobes
- furnishings for example curtains, linens, carpets, floor coverings
- household appliances for example televisions, fridges, freezers
- kitchenware for example crockery, cutlery
Replacement of domestic items relief is only available for expenses incurred from 6 April 2016 for Income Tax purposes.
You can claim this relief when:
- you carry on a property business that includes the letting of a dwelling-houses
- an old domestic item provided for use in the dwelling-house is replaced with the purchase of a new domestic item and:
- it’s provided for the exclusive use of the lessee in that dwelling-house
- the old item must no longer be available for use by the lessee
- the expenditure on the new item must not be prohibited by the wholly and exclusive rule but would otherwise be prohibited by the capital expenditure rule
- capital allowances must not have been claimed for the expenditure on the new domestic item
Accountants have financial expertise that’s crucial to the success of any business. They help keep track of your finances to ensure that you’re compliant. This also helps you with more profit instead of running on losses. With an accountant by your side, you’ll have no problem scaling your business.
Accotax is comprised of landlord accountants knowledgeable and tech-savvy enough about all types of businesses. We’ve helped hundreds of startups, fintech companies, and e-commerce businesses thrive over the last years. Whether you’re self-employed, a limited company, or a contractor, be sure to get in touch with our landlord accountants today to find out how we can help you!