Sherwin Currid: Expert Landlord Accountant Services

Tax Advice

Your expert landlord accountant

Being a landlord comes with a lot of responsibilities, and managing your property’s finances is one of them. Whether you own a single property or multiple properties, it’s essential to have the right property accountant by your side to help you navigate through the legislation and obligations that come with renting property.

Why is accounting important for landlords?

The accounting requirements that landlords must comply with are becoming an increasingly complex area of tax and legislation. Even experienced landlords risk being caught out by the April 2020 changes to finance costs tax relief.

At Sherwin Currid our team of accountants understand the needs of landlords and have specialist knowledge of this area so are able to provide a comprehensive service, ensuring you stay compliant and tax efficient while minimising your tax liability.

Regardless of whether you’re a professional landlord or you only rent out a property as a side business, you may benefit from managing your property as a business. Our specialist accountants can discuss this with you and can explain clearly the pros and cons of this.

Please be aware that even if you don’t make a profit as a landlord, you must still declare your rental income as a landlord.

How should landlords structure their property business?

As a landlord you have various options for how to run your business. There are advantages and disadvantages for each option and careful consideration needs to be given as to which is the best structure for yourself based on your personal circumstances.

At Sherwin Currid our specialist landlord accountants have many years of experience in advising landlords on how to structure their business so that they operate as tax efficiently as possible.

The main options for structuring your landlord business are:

Receiving property income personally, in your own name

This is the default option if you do not set up a company or other corporate structure to operate your business. You will pay income tax on any profit you make through a Self-Assessment tax return.

This may be a good set up for someone looking to rent out a second property which doesn’t bring in large amounts of income. If you have a larger property portfolio, and therefore more rental income, then you may want to consider other options that will decrease your tax liability

Limited Company for property, known as Special Purpose Vehicle (SPV)

Owning your property in a limited company means that you will pay corporation tax on any profits. You also avoid the Section 24 finance cost restrictions because they don’t apply to limited companies.

A limited company offers a tax efficient way of extracting income from your own business. You can control how you are taxed personally – potentially receiving a small salary from the SPV and supplementing this with dividends. Limited companies are increasingly popular structures for landlords and there is now a significant market available in limited company mortgages.

You should be aware that HM Revenue and Customs (HMRC) will view moving a property into a limited company as a sale and purchase transaction and therefore capital gains tax (CGT) and stamp duty land tax (SDLT) need to be managed with such transactions.

Accounting records required by landlords

Keeping accounting records for rental property income

Landlords need to account for all of the income related to their business. There are a wealth of incomings and outgoings associated with being a landlord and staying on top of your finances is crucial to abide by HMRC rules.

There are strict rules that cover what a landlord can charge a tenant in fees, this is covered by the Tenant Fees Act of 2019 which limits what can and can’t be charged to tenants by landlords and letting agents. The act also places limits on deposits and regulates how deposits need to be treated. A single breach of the act may incur a penalty up to £5,000. Further breaches may result in additional fines and may even result in a criminal offence.

The following fees are allowed under the act:

  • Rent
  • A refundable tenancy deposit. There is a deposit cap of no more than 5 weeks rent where the annual rent is less than £50,000 and 6 weeks rent where the annual rent is above £50,000.
  • A refundable holding deposit, when reserving a property, of no more than 1 weeks rent
  • Payments relating to the early termination of a tenancy
  • Reimbursements for utilities, communication services, TV licence and council tax
  • Fees, generally capped at £50, for changes to the tenancy agreement.

Several other fees are allowed but these need to be written into the tenancy agreement.

Understanding tax deductible property expenses

The main expenses that you need to track as a landlord fit into the following categories:

  • General business expenses such as office expenses, travel costs, mobile phones and marketing and letting agent fees.
  • Professional fees such as accountants, surveyors, solicitors and various insurancres
  • Property service fees such as gardening, cleaning, decorating and building work.
  • Repair costs at properties although please note that costs that count as improvements are not allowable.
  • Property charges such as council tax and utility bills.

Care needs to be taken as not all expenses are deductible at the end of the year. For example under Section 24 regulations mortgage interest can no longer be claimed as an allowable expense, a 20% tax credit is given instead.

If you are uncertain about what income you need to declare and what expenses you are allowed to claim it is worth seeking professional tax advice from an accountant. Our friendly team of expert landlord accountants are on hand for unlimited advice to all our clients, so you can ask any questions about what you can and can’t expense as part of your running of your properties.

Accounting software for landlords

Traditionally landlords used to keep their records on excel spreadsheets or even paper ledgers. These options are less frequently used these days as they are outdated, inefficient and prone to error. With the implementation of Making Tax Digital (MTD) for landlords imminent, it is advisable for business owners like you to embrace more modern solutions to ensure compliance with reporting their taxable income.

There are various options available such as FreeAgent and Xero. Here at Sherwin Currid we have experience working with all of the major software providers and are happy to talk to you about which would be best for your personal circumstances.

By using cloud accounting software you can easily keep track of your finances including total rents and total expenses across your portfolio. Furthermore, our accountants will be able to provide professional advice based off the real time financial data you upload, allowing us to help you make the right choice.

Why choose Sherwin Currid as your accountant?

We have worked with property owners for over 10 years providing landlord accounting services for a wide array of clients from those with a single property they wish to let to property investors with large portfolios. Our team includes property tax experts who will be able to guide you through the complexities of HMRC’s rules and ensure you are set up as tax efficiently as possible.

Get in touch with us today to discuss how we can help you.

Sherwin Currid Directors

Our founding directors, Martyn Currid and Max Sherwin, set up Sherwin Currid to help freelancers and small businesses with accountancy. Since then we have grown to look after a wide range of clients while keeping our personal, professional service.

Our Client Testimonials

Some of our clients have been kind enough to leave us reviews of our accountancy services. Don’t just take our word for it, read some testimonials to see how we help people with their business and personal tax.

Looking for a wide range of accounting support?

If you are interested in switching your accountancy to us then get in touch today.
We will organise a free consultation, where one of our specialists will talk you through your options.