Advice on how to make property accounting easier

For property landlords, managing the accounts can be a daunting task. There are many financial and operational aspects to manage, including rent collection, tenant communications, organisation of any maintenance and repair work, recording income and expenditure and the completion of taxreturns.However, with the right tools and strategies in place, property accounting can be madeeasier and more efficient.
By The Newsroom
Published 19th Jun 2023, 06:00 BST

Here are ways you can simplify property accounting: Keeping accurate records is essential. Ensure that you keep track of all your income and expenses in relation to each property.

This includes information on rent receipts, general repair and maintenance expenses, replacement of domestic items, water rates, council tax, gas and electricity bills, buildings contents and public liability insurance, letting agent and management fees, legal fees, stationary and advertising costs and any other expenses.

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By keeping records using an accountancy software package such as Xero, you can ensure you keep accurate records as well as having a better understanding of your business with the ability to track your cash flow and profitability position.

Landlords must get their accounting rightLandlords must get their accounting right
Landlords must get their accounting right

Furthermore, you can ensure you have all the information required to be compliant with your annual income tax reporting requirements.

*Use online billing systems. This can help make rent collection and payment processing easier. By allowing tenants to set up their preferred payment method they stay in control of their payments and time is not wasted on rent collection. They can make quick payments with credit or debit cards or by using direct debits to automate the payments to help them avoid rent arrears.

*Schedule regular property inspections to help you identify maintenance and repair issues. Having an organised system of scheduling regular inspections and book in required maintenance work can make your time more efficient and help to reduce costs on maintenance.

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*Completion of self assessment tax returns. By using an accounting software package you can manage your accounting needs which will in turn make the completion of your self assessment tax returns easier.

Under HM Revenue & Customs proposals, from April 6, 2026, you may need to follow the requirements for ‘Making Tax Digital for Income Tax’ where you own a buy to let or furnished holiday let property in the UK and have annual property income of more than £50,000.

From April 6, 2027, it is proposed that these requirements will be introduced when you have annual property income of more than £30,000.

Making Tax Digital is a government initiative transforming how people and businesses keep financial records and report tax data to HM Revenue & Customs. It is being phased in over several years and is in place for VAT registered individuals and businesses. When fully introduced, you or your accountant will need to use MTD compatible software to maintain and report digital records on rental income.

Forinformation as to how Hunter Gee Holroyd, York, could assist you, get in touch the tax team. Tel: 01904 655202 or email [email protected] or [email protected]

Related topics:VAT