It’s that time of year again when thoughts turn to the looming and dreaded tax return in January. If you want to avoid working on the figures over your Christmas holiday period, and never again, I’ve done that myself in the past, then you should start getting your papers together now.
If you are organised and you do your accounting as you go along, then you save yourself a lot of heartache and stress, because if you leave it all to the end of the year you have forgotten half of what’s gone on and it takes forever to sort it out.
There are lots of landlord software management and accounting packages available to help you with this and some will even help you prepare your tax return at the end of the year. However, because of their complexity, it usually takes a while to get yourself into whatever package you choose, it takes a fair amount of self discipline to follow every stage, and you must rely totally on the package. You always wonder if the tax calculations can be totally relied on when the figure pops out at the end of it all.
This is where a simple straightforward product like the PropertyTaxForLandlords software product comes into its own. Based on a simple Excel spread sheet you don’t have to be mastermind or an accountant or spend hours inputting data to see the whole tax picture when the figures are input.
Having been prepared by a tax accountant for the relevant tax year (2012-13), you can see all the figures in front of you and you can rely on the result that comes out.
Produced by landlord, tax accountant and author Steve Sims (Steve wrote “Understanding and Paying less Property Tax” for Wiley’s the publishers of the “For Dummies” series) the product downloads in three separate files:
(1) an Excel Spread Sheet pre-programmed to calculate your tax liability in 13 logical steps (pages),
(2) a 15 page .pdf manual to guide you step by step through the process, and
(3) another 9 page .pdf guide on Claiming Property Business expenses for Landlords. The latter is a comprehensive guide to what you can and cannot claim for.
The tax calculator is suitable for owners of buy-to-let, HMO or furnished holiday let businesses in the UK completing the SA105 UK Property pages for their 2012-13 self assessment tax return.
What would at first sight seem a simple process of claiming for what you are entitled to, it gets a little more complicated when you realise that HM Revenue & Customs are rather vague on what you can legitimately claim for, but can fine you if you include expense items you should not be claiming for.
The included Tax Guide explains all this in detail and the step-by-step manual bundled with the software explains how to enter the data to produce a tax report for each owner. The software splits rental income and expenses according to each owner’s percentage share of the property. Also, the software can cope with an unlimited number of properties.
Even if you do use a full-blown property management software package it’s worth using this to double check your tax calculations because it makes the process transparent rather than having a “black-box” churning out a figure. If you use an accountant, it’s well worth going through this simple exercise to get your figures organised, save the accountant’s time, and again it’s a double check on the outcome.
If you don’t use an accountant then with this product you are able to get a complete understanding of your property tax position before you submit your return and you know you can rely on the outcome – what you can claim and exactly what tax you have to pay, if any.
At £29.95 this product is priced at a level which any landlord can afford once a year to give them the peace of mind that’s so important when dealing with tax and HM Revenue and Customs.
In my opinion Steve Sims has produced a great product at a realistic price and something that will be a real help to landlords with businesses of all sizes.
By Tom Entwistle