Self Assessment - Accountants

[ivrytwr3]

Hi all,

Taking Ramniks advice from a previous thread, i have contacted a few accountants and asked the following questions:

Do i need an accountant to inform the IR that i wish to nominate a property as my PPR:

1. You do not need an accountant to nominate your newly purchased property as your private residence. You will just need to write to your tax office (usually Cardiff for RAF personnel) and to your wife’s tax office as the property is in joint names to advise them. You should advise them within two years of the date of purchase.

Do you offer a service of completing self assessment tax forms?

2. We do offer completion of self assessment tax returns. Assuming that you and your wife are not already completing tax returns then you will need them for the 2006/07 tax year as your rental income did not start until April 2006. Our current fees would be £450 plus VAT for your return and £400 plus VAT for your wife’s. There is a 10% discount on these figures if all information for completion of the Returns is provided by 31 October following the end of the tax year.

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1st answer is good for me, but i am concerned about the second. I really wanted an accountant to complete my self assessment tax form as it will be my first, but the cost is astronomical!! (especially as i didn't realise i would have to complete 2, wife and I).

So is the figures quoted reasonable for this service?

And lastly, the accountant states that i only need complete a form fo 2006/2007. but in 2005 we were preparing the house for let and spent a small fortune on materials and work etc (about £2k)... which i was informed i would be able to claim back the VAT on. Is it worth worrying about this amount or can i add it on to this years self assessment?

Ta all!!

[ivrytwr3]

Yey!! Had a better offer from another accountant:

"I assume that the property is in joint names and it will be necessary to prepare tax returns for both of you. Our normal charge would be £200 each but we would do both returns for £300+VAT"

Getting better!!

[Tax Accountant]

Hi all,

Taking Ramniks advice from a previous thread, i have contacted a few accountants and asked the following questions:

Do i need an accountant to inform the IR that i wish to nominate a property as my PPR:

1. You do not need an accountant to nominate your newly purchased property as your private residence. You will just need to write to your tax office (usually Cardiff for RAF personnel) and to your wife’s tax office as the property is in joint names to advise them. You should advise them within two years of the date of purchase.

Do you offer a service of completing self assessment tax forms?

2. We do offer completion of self assessment tax returns. Assuming that you and your wife are not already completing tax returns then you will need them for the 2006/07 tax year as your rental income did not start until April 2006. Our current fees would be £450 plus VAT for your return and £400 plus VAT for your wife’s. There is a 10% discount on these figures if all information for completion of the Returns is provided by 31 October following the end of the tax year.

------------

1st answer is good for me, but i am concerned about the second. I really wanted an accountant to complete my self assessment tax form as it will be my first, but the cost is astronomical!! (especially as i didn't realise i would have to complete 2, wife and I).

So is the figures quoted reasonable for this service?

And lastly, the accountant states that i only need complete a form fo 2006/2007. but in 2005 we were preparing the house for let and spent a small fortune on materials and work etc (about £2k)... which i was informed i would be able to claim back the VAT on. Is it worth worrying about this amount or can i add it on to this years self assessment?

Ta all!!

(1) Just as you do not need a wife to cohabit, you do not need an accountant for a lot many other things including praparing accounts and tax returns. But whether it is advisable for you not to have one (either a wife or an accountant) is another thing. One thing is sure, neither come cheap. But this doesn't stop most people from having one.

(2) Nomination is not difficult if you read all the published materials and your facts are quite straightforward. Accountants may be able to point out technical things which you could easily miss, eg, the 2 year period from the date of purchase mentioned by you is not set in stone. It can re-commence again on a date when a previously let property has started being used by you as your secondary residence.

(3) Fees quoted appear expensive to me. In a straightforward case, it could cost as little as £250 for both.

(4) Read published material on Inland Revenue website and in particular ''Property Income Manuals''. Pre-trading expenditure such as decorating etc for preparing a property for letting could be treated as having been incurred on the first day when letting actually commenced.

Ramnik

[Taxation Solutions]

ivrytwr3

I thought I would add my two pence to the thread. Basically you do not need an accountant. I would suggest you need a tax specialist. However, as you are quite within your right to submit your own tax return, you do not require either!!

I would suggest you ask yourself the following:

1) Are you confident that you could handle your own tax affairs?
2) Is employing the services of an accountant purely on price the best for you? Be aware that if someone is charging you £200 you will only get £200 worth of service!! Buying on price when dealing with tax matters can be very expensive in the long run if you receive the wrong advice!!
3) You need to be aware of the pre trading rules relating to property i.e. is the expendituire incurred prior to letting the property capital or revenue?
4) Residential letting is not vatable so I am concerned about the advice you have received that VAT can be claimed back!!

In my experience as a property tax specialist you do pay for what you get. I have lost count of the numbers of client's who wished they had used the services of a specialist. As a property owner you need pro-active advice not just someone to do a form filling exercise.

Jason

[Taxation Solutions]

ivrytwr3

I thought I would add my two pence to the thread. Basically you do not need an accountant. I would suggest you need a tax specialist. However, as you are quite within your right to submit your own tax return, you do not require either!!

I would suggest you ask yourself the following:

1) Are you confident that you could handle your own tax affairs?
2) Is employing the services of an accountant purely on price the best for you? Be aware that if someone is charging you £200 you will only get £200 worth of service!! Buying on price when dealing with tax matters can be very expensive in the long run if you receive the wrong advice!!
3) You need to be aware of the pre trading rules relating to property i.e. is the expendituire incurred prior to letting the property capital or revenue?
4) Residential letting is not vatable so I am concerned about the advice you have received that VAT can be claimed back!!

In my experience as a property tax specialist you do pay for what you get. I have lost count of the numbers of client's who wished they had used the services of a specialist. As a property owner you need pro-active advice not just someone to do a form filling exercise.

Jason

[Tax Accountant]

By ivrytwr3:
''.... in 2005 we were preparing the house for let and spent a small fortune on materials and work etc (about £2k)... which i was informed i would be able to claim back the VAT on. Is it worth worrying about this amount or can i add it on to this years self assessment?''

By Taxation Solutions:
''.....Residential letting is not vatable so I am concerned about the advice you have received that VAT can be claimed back!!''



It depends.

Yes, residential lettings is not taxable, but it may still be possible to claim back lettings exempt VAT input if the landlord has a VAT registration for a different taxable activity and the exempt Input falls within the ''de-minimus'' levels.

Ramnik