6 Reasons Why Landlords Should Hire A Property Accountant

Hiring a specialist property accountant can provide huge advantages to potential landlords and people who already have a property portfolio.

In order to make investments successful one, good financial information and up to date advice is vital. This is where property accountants can really help. Here we discuss 6 reasons why landlords should hire a specialist property accountant.

Benefit from their Expertise

One of the most obvious but important benefits is that landlords can gain access to their accountant’s wealth of knowledge and advice.

A specialist property accountant will be well-versed in property taxes, the best way to maintain accounts and the HMRC reporting processes. A property accountant that can be consulted to answer queries is invaluable and can save a landlord money and time.

Be made aware of legislation changes

Legislation is regularly changing. However, a specialist property accountant will always be up to date and ready to tackle any changes that will affect property landlords. Rather than the landlord having to undertake extensive research on the changes themselves, their accountant will already know and will be in a position to ensure landlords are compliant at all times.

Always have up to date accounts

Company accounts need to be kept up to date as a legal requirement. However, landlords that have access to up-to-date accounts can use this information to their advantage. This information can help landlords understand if they are running at a profit or a loss. They might need to adjust rental amounts or reduce maintenance costs. In addition to this, landlords can keep track of any late payments and ensure their receipts and bills are always in order. Accurate record-keeping will benefit landlords in the long term and will provide peace of mind that everything is in order.

Software

By using software such as Xero or Quickbooks, having up-to-date financial information has never been easier. Landlords do not need to wait until year-end to truly understand the financial health of their business.

It can be difficult for landlords with a large portfolio to keep track of all outgoings and income. This makes the assistance of property accountants even more helpful and time-saving.

Help to claim expenses

There are several expenses that landlords can be claimed against taxable rental income. The expenses must be for the purpose of renting out a property but can cover a broad range of costs.

Common types of deductible expenses include:

 Water, gas, electricity and council tax bills

Letting agency fees

General maintenance and repairs to the property.

Mortgage interest (now restricted)

Landlord’s insurance

Wages of people providing a service for the property such as cleaner or gardener

Accountants fees

The list above is not an exhaustive list. For more information on what does and does not class as an allowable expense visit GOV.uk

Some landlords may be aware of all these expenses that they could claim for however, some may not be aware. A specialist property accountant will guide a landlord to ensure all expenses that can be claimed are being claimed.

Help landlords save on taxes

There are certain tax reliefs that landlords may be eligible for. A specialist property accountant will easily be able to discover which ones are best for the individual landlord.

For example, if at any point a landlord wants to sell a property which is not their permanent place of residence, the sale will be subject to Capital Gains Tax. This involves paying a proportion of the property sale to the government. Experienced accounts will be able to help plan for this situation in advance.

Can help plan for the future

Finally, a great advantage to landlords from using a property accountant is having access to an expert whenever there are any business decisions to be made. Accountants are there to help business owners and their companies. Landlords can have confidence with the knowledge they have specialists at hand.

A property accountant who is able to supply landlords with up-to-date financial information about their business will allow the landlords to plan for the future.

For example, although landlords may have purchased a property for the sole purpose of renting, there may become a time when they want to sell the property. A specialist property accountant will be able to help the business owner prepare for such eventualities and be able to advise accordingly to discuss the best options.

A landlord may decide to invest in more property. If this is the case, a specialist property accountant will be able to guide them through the process, help them understand whether they are in a suitable financial position, what their budget should be and more.

Summary

As the list above suggests, there are numerous benefits to landlords working with a specialist property accountant. Also, landlord tax accounting changes and updates regularly, therefore it is often complicated. Buy-to-let landlords have specific tax rules that apply to them. Having a property accountant who is familiar with the industry will be able to provide an invaluable service. A property accountant will also ensure landlords are tax compliant and help them run their business as financially efficient as possible.

What’s Next?

Whether you are a new landlord or are an experienced landlord, the list above shows just some of the ways hiring a specialist property accountant can help your business. The team at Wright Vigar are here to help you get the most out of your property investment. Give us a call on 0845 880 5678 or email us on website@wrightvigar.co.uk