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Just need a bit of advice on book keeping I've just set up a LTD company and bought my first buy to let in the company. I've never really done any book keeping and just wondered what I need to log down I know basics rental income mortgage cost and expenses but do I need to right down every transaction ie buying materials for doing the house up etc and also I'll be paying friends who are plasters painters for doing work can I just draw the cash out or do I need to get receipts to show what the cash went out for.
Thanks for your help
Basically you need to have receipts for every single penny you pay out on doing up, fitting out and equipping any investment property. Others may know better than me but am sure you will be well advised to keep full records of any expenditure related to your business, phone and broadband, fuel, stationery etc and certainly fees in relation to purchase of property, legal, brokers, surveys etc etc. And, yes, proper receipts from your mates re plastering etc
Its quite easy to keep books for a singe property
Its basically a three line account with a little detail record what comes in and what goes out in a file
keep all bank statements and at the end of the year hand over the info to your accountant
The accountant will prepare the accounts for the company
Job Done just don't throw anything away
Learn Change and Adapt ?????
I am in a similar position but don't complete on my first property until later this year.
Dislexic_Landlord - you mention 3 lines on a spreadsheet? Are these 3 categories? Is there a proforma or template you may have or somewhere I can find one so I am reading to start compiling a file?
I think he means columns and they're In, Out, and Balance for each transaction!
If you could kindly give me and example of how you would do it and point me in the right direction on which file or book would be best for me to fill out.
Thanks again Jordan
Ps if you need to know anything about plumbing and heating I'm your man ☺
I try to keep the work to a minimum,
The company bank account records every thing that goes in or out. At the end of the financial year I download the transactions into a spreadsheet add explanations where it it not immediately obvious and send the spreadsheet to my accountant.
I do keep my receipts just in case I need to prove my expenses. If I pay in cash I then transfer the money from the company account to my own.
Are you going to employ an accountant to do your tax return, or are you going to do it yourself? WADR (I made that up) judging by your questions I would recommend getting an accountant. Then you can just hand over a biscuit tin of receipts and have a happy life.
HMRC are very suspicious of cash so if you are trading in cash have very detailed records so that they can follow up where you are getting cash from (& that you are declaring it all) and who you gave it to (so that they can check that person has declared it). TBH cash is more trouble than it's worth. 10 years ago I handled a lot of cash (20% of my turnover), but for the last few years I have been totally cashless. Everybody uses internet banking, and there is no need for cash, and it makes life so easy.
Yes I've got an accountant. I'll just jot everything thing down ins and outs with an explanation next to them and had a box of receipts over to the accountant it's his job then. If that's what most do I'll do that seems pretty simple.
I'll have a word with the trades men and see if they will take payment through online banking it's easier for me. I hope the price doesn't go up now as I'm not sure they declare it all.