Accounting for Landlords
Whether you're a professional landlord or you only rent out a property as a side business, you might benefit from speaking to our team of landlord accountants that specialise in providing business and tax advice for landlords.
Why Do I need a Landlord Accountant?
Despite recent changes in taxation, buy-to-let mortgages continues to remain popular in the UK.
If you get rental income from privately owned property, you are considered a landlord and you'll have to pay income tax on the rents you receive.
Keeping your financial records up to date is important so that you can work out your expenses and accurately claim tax relief. If you make a loss, you might even be able to bring losses forward across tax years.
Most of our landlord accounting clients rent out property on the side of their main career. Experienced landlord accountants can therefore provide a helping hand and take away the time consuming burden of reporting to HMRC and optimise your finances.
Making Tax Digital (MTD) for Landlords
Making Tax Digital for Income Tax Self Assessment is starting as of April 2024. For landlords earning over £10,000 from rental income, or a combination of sole trader and rental income, this will mean the following:
Digital Record Keeping
Software must be used to keep accounting records relating to the landlord income that you declare as income tax. Data from invoices that you send or receive must be stored digitally. PKPI.UK work with several approved cloud bookkeeping software so there is a suitable service for all businesses.
Updates and Reports
You will need to make quarterly updates to HMRC. Depending on the software you use, this will likely be quite simple but will need much more maintenance than what is currently required. If your rental income is £10,000 or below, then you'll continue using Self Assessment.
While 2024 might seem a long way off, it is important to start getting ready for MTD early so there is a smooth transition. Cloud bookkeeping software might be mandatory from 2024 onwards, but there are plenty of benefits of using it now such as reduced time on administrative tasks, better visibility for your accountants and a clear view of incoming and outgoing payments.