Keeping track of your expenses, income and taxes as a landlord can be exhausting. Here are the main things that will help either you or your accountant to keep everything in order.
Keep track of your expenses:
Over the course of a tenancy you will need to spend money, at the very least to maintain the property. Many of these expenses are deductable, so keeping track of them is vital to make sure you’re not paying out too much.
Keep an accurate record of your income:
This is particularly useful for the end-of-year self assessment form. Your accountant (with all your income and expenditure records) will fill this form out for you – saving you a lot of hassle. Having accurate records of your income will save your accountant time (and you money).
Keep your expenses organised:
There is nothing worse at the end of the tax year, than trying to root out every relevant receipt. Keep your expenses organized as it will save you or your accountant a lot of time.
Don’t bin your receipts:
Keep your receipts for up to six years – you never know when they may come in handy. Tax disputes in particular come to mind.
If you are a new landlord, then hiring an accountant to begin with might be a savvy bet. After a year or two of renting out your property, and observing your accountant at work, you might feel comfortable managing the accounts yourself.
We've written about a few strategies to increase tax efficiency in the past. Take a look here