Whether you’re a one-person band with a single buy-to-let property, or you are the director of a limited company with a bustling portfolio of properties, hiring a specialist landlord accountant could help you considerably. In this article, we summarise the benefits of appointing a landlord accountant to help you manage your collection of properties.
A variety of options for sole traders and limited company directors
Landlord accountants provide a range of services tailored to all types of landlords – from sole traders with a handful of buy-to-let properties to limited companies with dozens. It doesn’t matter how many properties you have in your portfolio; hiring a specialist landlord accountant could save you heaps of time and money. And, most importantly, an accountant can help you set up the operating structure that is most suitable to your requirements and the arrangement you’re comfortable with.
Assistance from the offset
If you are new to the world of property, hiring a landlord accountant can provide you gather all the information you need to be successful so that you can move forward with complete peace of mind. And, with dozens of well-respected accountants in the UK marketplace, you have a lot of choice.
Many leading accountants will have partnered with providers of accountancy software. As a result, you could benefit from your own profile on a piece of software designed exclusively for landlords. Software could save you plenty of time and can assist with many critical administrative responsibilities, including HMRC correspondence, storing expenses, managing finances, Making Tax Digital, and more.
Assistance as and when you need it
Hiring an accountant has plenty of advantages, but on-demand assistance is one of the best. Almost every accountant will provide unlimited support via telephone and email. However, make sure you’re aware of their opening hours.
Setting up a special purpose vehicle (SPV)
The concept of setting up a special purpose vehicle, a company specially designed for directors to run a buy-to-let business, is growing in popularity. There are loads of benefits of setting up an SPV, including:
- Greater mortgage choices – Lenders of buy-to-let mortgages usually prefer corporate vehicles because they are simpler to understand and underwriting is more efficient.
- Tax-efficiency – Being the director of an SPV is the most tax-efficient way to operate as a landlord in the UK. This is because limited companies are responsible for corporation tax rather than capital gains tax compared to sole traders, which is more profitable.
- More control – If you have an SPV, you have more control over finances and can choose when to take out money. This can further help reduce your tax liability depending on your circumstances.
- More capital – When an SPV is involved, there is no income tax due on retained profit, meaning you have more capital to reinvest in purchasing new buy-to-let properties.
- An easier life – An SPV allows you to have multiple buy-to-let properties under one, easier to manage interface. This can help you save time and reduce running costs.
- Limited liability – Running an SPV means your company is its own entity, and consequently, you will have limited liability and more protection against potential financial risks.
Appointing a specialist landlord accountant to help you start and run an SPV could help you manage your properties with confidence. Not only will a landlord accountant reduce your administrative responsibilities, but they can also ensure you’re operating as tax-efficiently as possible, resulting in exceptional value and higher profit.
Making Tax Digital requirements are changing, and landlords will have greater responsibilities
From April 2024, landlords with an annual income greater than £10,000 will need to comply with the new Making Tax Digital (MTD) rules. The new rules mean that you will need to send quarterly income updates and expenses via an HMRC digital tax account, and tax information is calculated in real-time. Rather than submitting a self-assessment, you need to sign a declaration that confirms your quarterly submissions are accurate. Your tax will need to be paid by the end of January the following year.
If the concept of increased MTD responsibilities makes you uneasy – don’t panic. Firstly, you are not alone, as this will impact many landlords throughout the UK. Secondly, there is plenty of helpful information on the government’s website. Thirdly, hiring a landlord accountant will almost certainly reduce the burden, and they’ll be set up and ready to provide you with the assistance you need. Not only can an accountant help you with the MTD setup, but they can also assist with the quarterly submissions, and your self-assessment (if you have additional sources of income).
Assistance with tax rules and ongoing changes to legislation
Landlords can be subjected to numerous taxes and pieces of legislation, including stamp duty, capital gains tax, income tax and national insurance contributions – to name a few. A well-respected and qualified accountant will ensure you pay the correct taxes and abide by the relevant legislation.
Changes in legislation can be frustrating and challenging to understand. However, they’re part and parcel of being a taxpayer in the UK, and they’re unlikely to stop any time soon! Responsible accountants will prioritise being up to date with all the latest rules and regulations. As a result, they can pass on reliable information to their clients. Therefore, choose an accountant with a good reputation, and you’ll be in the very safest hands.
Guidance regarding your expenses
Specialist landlord accountants are well equipped to provide you with dependable advice regarding your expenses. As a result, they can help you reduce your tax liability – while ensuring you remain fully compliant with the government’s rules and regulations.
With so many landlord accountants to choose from, there are some exceptional offers out there. For a small monthly fee, you could get the support you need to manage your properties – allowing you the time to focus on other ventures or to grow your property portfolio.
A landlord accountant isn’t for everyone. However, if you are looking for expert support with your HMRC correspondence and administration, an accountant could be the perfect solution. And, using an account certainly isn’t permanent. IF you decide at a later date you’d rather go it alone or you want to switch your accountant provider, doing so should be stress-free. However, before you commit to the services of an accountant, read the terms and conditions carefully to ensure there are no leaving fees.
Churchill Knight’s landlord accountancy services
Churchill Knight is a specialist landlord accountant. Backed by professionals with over 20 years of industry experience, we can help all types of landlords, from new landlords with one buy-to-let property to small businesses with multiple properties.
We have carefully tailored packages specially designed for all operating structures, including sole traders and existing SPV directors. If you’re interested in launching an SPV for the first time or you’d like to transfer existing buy to let properties to a new business, please get in touch with us for a free consultation.
There is a series of guides on the Churchill Knight website designed to help both sole traders and small businesses that specialise in buy-to-let properties. These guides include:
Founded by an IT Contractor in 1998, Churchill Knight has become one of the most respected contractor accountants in the UK. We’ve helped over 20,000 contractors with their accountancy requirements. As well as our accountancy services, we also have an industry-leading PAYE umbrella company and dedicated in-house personal tax department. Whichever service you choose, you can move forward with complete peace of mind. We are proud of the reputation we’ve built over the years, and our FCSA accreditation proves how committed we are to compliance within our sector. Keep reading…