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ben sewell

First buy to let - accountant questions

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Hi, 

If anyone would be kind enough to offer advice or recommendations, then it would be massively appreciated.

My goal is to slowly build up to 3/4 properties, medium to long term reinvestment with my partner, relying on my employment for day-to-day living costs.

I have put in an offer on my first BTL/refurb which has been accepted.

I have discussed this with an accountant, who suggested this is best purchased under a LTD company to be more tax efficient. They have offered to do our accounts, but the fee is £72 per month, per director, which would largely eat in to our profits on a single BTL.

My questions are:

  • At this stage, can we self manage a company?
  • Are there any useful tools you would recommend in tracking expenses for year-end filing?
  • Is an accountant worth it for one BTL?
  • If yes, would you recommend anyone?

Again I would really appreciate any input in to this. While I'm comfortable tracking and identifying expenses and profits, tax just confuses me.

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A few people have recommended a company called Rita 4 Rent on this site. It may be worth giving them a call? 

I would say that you could manage one BTL. Keep a folder of all documentation and have a bank account solely to see the income and outgoing of your BTL(s). This will make it easy when you come to do self-assessments at the end of the year. 

There is a free course on PropertyHub - https://propertyhub.net/course/property-tax-for-beginners/ which make it easy to understand tax and become more tax efficient. 

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9 minutes ago, howzit said:

A few people have recommended a company called Rita 4 Rent on this site. It may be worth giving them a call? 

I would say that you could manage one BTL. Keep a folder of all documentation and have a bank account solely to see the income and outgoing of your BTL(s). This will make it easy when you come to do self-assessments at the end of the year. 

There is a free course on PropertyHub - https://propertyhub.net/course/property-tax-for-beginners/ which make it easy to understand tax and become more tax efficient. 

Thank you, I'm just taking the course now and it's very good!

I'm also following up on a few leads (it turns out I knew an accountant!), but will keep Rita 4 Rent in mind.

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In considering an LTD, a useful question to ask might be are you a higher rate tax payer / foresees you being a higher rate tax payer (based on total income, salary plus property profit). 

If not, what is the benefit of having a Ltd in your circumstance

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4 minutes ago, kent614 said:

In considering an LTD, a useful question to ask might be are you a higher rate tax payer / foresees you being a higher rate tax payer (based on total income, salary plus property profit). 

If not, what is the benefit of having a Ltd in your circumstance

Hi Kent, I am currently below this threshold, however my employer recently introduced a bonus structure which, on its own, could bring me over this threshold. The figures on the deal I have will also bring me around £10 below this threshold, so with any fluctuation, or salary increase, I could see myself past the tipping point.

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My calculations suggests if you are close to the threshold, likely to go over, then an LTD is worthwhile as income from the LTD would be taxed at corporate tax rate and not the higher tax rate. 

Good for building up assets in the LTD, and re investing

But getting money out the LTD, beyond the dividend allowance will be taxed too. 

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