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  • Tax

    Landlords filing their tax returns

    We at TheHouseShop.com are interested to find out how many landlords are currently using accountants to file their self-assessment tax returns, prefer to do it themselves or have previously done it independently but are now considering hiring an accountant due to recent government changes to BTL property management.

    We have also posted a survey to find out more about landlords self-assessment accounting methods.

    We want to hear from you, in light of the recent push back from the government on Making Tax Digital to 2020, whereby landlords will be required to make quarterly payments to HMRC, would you potentially hire an accountant should this come into force?

    Thank you for your participation and thoughts, we look forward to the discussion!

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    How weird, I've literally just finished filing my own tax return and then seen this question.

    i have always done my own tax returns and, as long as they continue to consist of a series of questions to be answered, as they are now, I shall continue to do so, seems pretty straightforward to me. There's always a book or two to help one through it, anyway.

    In contrast, where figures and information have to be presented in a particular format, like company accounts, I shall defer to the expertise of a qualified accountant.

    Also, isn't the most recent news that landlords won't have to do much differently to now unless their rent turnover is above £83,000?

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    I use an accountant. He makes mistakes, but so do I and crosschecking his workings with mine eliminates the errors.

    What " recent push back from the government " are you refering to?

    As I understand it the latest situation was from April 2019 businesses that pay VAT would need to make quarterly submissions and there would be a review before it was extended? Since there is no VAT on rent that would exclude landlords, unless they voluntarily registered.

    From https://www.gov.uk/government/publicatio...ax-digital

    Businesses will not now be mandated to use the Making Tax Digital system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold – the smallest businesses will not be required to use the system, although they can do so voluntarily.

    This change means that no business will need to provide information to HMRC under Making Tax Digital for business more regularly than they do now. VAT has been online since 2010 and over 98% of VAT registered businesses already file electronic returns.

    [snip]

    By introducing Making Tax Digital for Business on a voluntary basis for most and only making it mandatory for those who already interact with HMRC regularly and digitally, we can smooth the transition maximising the opportunities of a modern digital tax system.

    The government has committed that it will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespread.

    Here is the official announcement.from 13 July.

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    I will be using an accountant, as this is my first year as a landlord, and I've done a substantial reburbishment, so I need to ensure I'm claiming all I'm allowed to claim.

    I might do my own in future years, but for peace of mind, I prefer to use an accountant who specialises in BTL accounting.

    Carol

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    Thanks for your input Carol, it's great to hear from landlords who are managing their own tax returns.

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    Hi Peter,

    Thanks for your contribution to the discussion!

    We were referring to the Making Tax Digital push back to 2020, which will require landlords to file their self-assessment tax returns on a quarterly basis.

    It's interesting that even though you employ an accountant, errors are still made in regards to your self-assessment tax return. Would you continue using one or consider doing it yourself?

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    I will continue to use an accountant. I need someone to check my calculations.

    With regard to Making Tax Digital there is only a possibility of having to make quarterly returns in 2020. Currently the plan is that businesses that pay VAT will have to do so for VAT in 2019, and that no other business will be affected until 2020.  Then if it is working well it may be extended to other taxes and possibly businesses. I would expect it to be extended to other taxes before other businesses so I suspect it will be even longer before LLs are affected.

    The intention is to replace self=assessments rether than make them quarterly. They will be using information from other sources, which they have been able to get since last year, such as mortgage puments. Account ing software will need to be used. So I think you will just need to enter things like rent payments and expenses into the software and send it off every quarter. Or maybe sent it off to your accountant each quarter.

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    I've been doing my own returns: Since finding I had to "remind" my paid accountant about a minor item missing on the return he had prepared... lossess carried forward... Two years in a row..  Nearly lost a lot of ££££


    There are good books on property tax: likely to save you more than they cost.  There are more than 10 taxes a landlord may pay, don't just focus on income tax, it might cost you, ignoring the bigger picture!

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    To answer the original question, I used to run a recruitment company which was limited and always used an accountant for everything apart from VAT which I did myself.

    As a LL which is not Ltd, I am not sure yet, I will see how I feel on 01/10/2017 Smile as by nature I keep everything in date order, colour you name it so my former accountant said working with me was easy as I did most of it.

    Tketa_Kev

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    Thanks for letting us know Tketa, it's interesting you mentioned the organisation side when you were managing your accounting, as we have found that some landlords struggle with the organisation of their finances.

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    I think consumers can struggle with domestic finances and consequently should a consumer 'accidentally' they end up being a LL then they struggle even more. A classic case is when two people meet and rent our one of their properties - that was probably never on their plan of life and thus the latter can cause issues, this is all understandable. However, if you a person (like me) who approached property and LL as a business and know what to expect then it makes life easier?

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