My sentiments entirely.
Thanks for the advice Cath.
One question for you my first tenancy started on 06/04/19 so the first months rent (£346.47) was paid in advance & declared the year before.
I was told by hmrc I didn’t need to pay tax for that year so should I declare it this year or not.
Stuart
Thanks Colin, I don’t think I’m quite in your leage yet 
@stuart3 If you declared it last year, you don’t need to declare it again this year. It is normal nowadays to do your land and property pages on a cash basis, so, if you use that basis, the fact that the rent was received in the last tax year is the key fact rather than the fact that it related to April. You could have chosen to do the return on an accruals (matching income and expenses to the period that they relate to), but that complicates matters because you then have to work out which period each rental income receipt relates to and also which period often annual costs like insurance relate to and defer some of the income and expenses. Similarly, you could also include costs not yet paid (such as the accountancy fee for the year if you chose to use an accountant) if you were using the accruals basis.
If you are doing it yourself, I would definitely use the cash basis - I am an accountant and I still use the cash basis because I have better things to do than working out rent apportionments!
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@chris35 It depends how much you value your time. I could choose to train as an electrician so that I could do my own EICRs but my time is more valuable to me than that when I can pay an electrician to do them for me!
Likewise, many of my clients are too busy with their day jobs to bother with keeping themselves up to date with changes in tax rules, so they value the fact that I am there to keep up to date for them and let them know when things change. If you have the time and the inclination to do that, then that is fine - each to their own.
It is also a bit like me telling someone that uses an agent to let their property that they are stupid to do so because I do my own and its easy - it is personal choice. Some people just don’t want the hassle of letting their own/dealing with tenants etc and that doesn’t make them stupid. Others don’t want the hassle of doing their own tax return, and again, that doesn’t make them stupid either!
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@Stuart3 …and you don’t necessarily need receipts for travel - if you have driven to the property (or to the DIY shop, your accountant etc) then you can claim mileage allowance at 45p per mile (assuming it is not over 10,000 miles in the year!).
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I agree, each to his own, but accounting for a single, or multiple for that matter, BTL’s is not that time consuming or needing specialist training and qualification. Also if they are serious about treating the venture as a business, they should be aware of their expenses and the financial performance of said business.
Nor did I say anyone wishing to use an accountant are stupid - your words not mine.
I wired a new conversion of 11 flats in it’s entirety, without a single days formal training as an electrician, only a 2 hour sit down with my friendly electrician and a good read of the regulations, I’m an architect, it isn’t rocket science, mostly simple hard slog, since I didn’t have the time constraints, which I fully understand most people have other commitments. My electrician inspected it at various stages and declared it more than fit for purpose, better than he would have done in some instances. Of course I’m not qualified to carry out EICR’s or gas safety checks, and like you, although I was encouraged by my electrician, I have no inclination to add specific training for the necessary trades to carry out such works myself.
Building the flats myself had many benefits, not least of all, knowing where everything is and that it was done properly.
I now also have a letting agent, only since I retired overseas, and cannot physically attend to the necessary hands on work. Although I would encourage every first timer to self manage, and learn the business properly, before placing total reliance in some “professionals” since, for example, letting agents are not subject to any certified training, and can ruin your business and reputation very easily, if not fully competent. They don’t have your personal commitment, nor the financial consequences to consider.
I stand by my statements that some of your specifically referred clients should consider whether they have any aptitude to manage such a business, considering the raft of legislation, laws and safety requirements, since these days they could be locked up, or at least heavily fined, for their transgressions, not to mention the potential losses of an uninsured building.
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Thank you Cath,
I was going to declare it to be on the safe side but now I’ll remove it.
Stuart
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Hi
I use a software called Arthur Online. I believe it’s free if you have a limited number of properties. I used to use a software called Landlord Vision and again I believe it’s free if you have a few properties. I recommend you go online line and take a look. It’s worth using a purpose built software to manage your properties.
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Thanks Cath
Do I need a mileage record
If HMRC ask, then you would need to be able to produce one, so best to do one so that you know you have the right figure. I tend to use Google maps to remind me where I have been rather than keeping a record as I go (Big Brother is watching you!): If you have an Android phone and you have given (or probably not not given!) Google permission, they will have tracked your every move. Just go to Google maps (I use the desktop version for this) and log in and then go to Timeline in the menu and Google will show you everywhere you have been. If you click on a day in the graph, it will give you your destinations for for the day and a mileage figure - not 100% accurate, but it is a start. So, for example, I can see that on 22nd, I went from my house to Screwfix, to a rental property, to Wickes, back to the rental property and then home. Google timeline tells me that is 10.1 miles, but if you actually map it out it was 15.3.
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Aside from our earlier exchanges, I do applaud you for your generous, knowledgeable / professional advice for Stuart and other less experienced landlords. Thank you.
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A good friend of mine is a chartered accountant and he advised me some time ago that if you produce your own self assessment tax return rather than having the oversight of an accountant submitting it, you become a target for HMRC. He is not my accountant btw as his business is in corporate finance. This is mainly because the allowances, tax deductions and interpretations are nebulous and so they expect mistakes or omissions if its not your day job. I have been to a tax tribunal and the fact that I had shown letters communicating tax queries on my self assessment and asking at least 4 different agents whether I had this right they take the line that you should know your tax liabilities as all the information can be found in the 17000 pages of tax law which has trembled in size since 1997 (sarcastic but true). So they took me for another £3,500 (which the accountant I then chose to use for future tax returns found sitting on my tax account and with a bit of good fortune had it returned to me). My advice therefore is use an accountant. It will save you a lot of time and money and your accounts will go through without a hitch as HMRC know its had oversight from an accountancy firm. It is also a tax deductible cost.
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Mike22 Totally agree with you
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There is a free software called wave accounts.
Really simple to use. Just upload a bank statement and check the transactioms that refere to your business…
It does all the rest for you even has a profit and loss sheet. And does yoir taxes and its FREE to use
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Wave is no longer available for new sign ups in the UK. Quote from their email to customers…
As of November 30, 2020, new Wave account sign-ups are limited to US and Canadian business owners only. Businesses located in other countries will not be able to sign up for a Wave account after November 30.
As a current Wave customer, your Wave account remains active.
Additionally, as of November 30, 2020, Wave will no longer offer email support for most customers outside the US and Canada.
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… I’m going to have a look at Pandle when tax return season is over. That has a free option.
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Another thought. Tax returns as we know them will soon be defunct anyway. MTD is looming… Overview of Making Tax Digital - GOV.UK
Landlords with income over £10,000 (that’s gross rental income, not profit, so one property in many areas and you’re caught!) are going to have to report their income quarterly from digital records (ie you can’t work it out on paper and then type it in the HMRC website) and then do a final confirmation filing with any year end adjustments (effectively the tax return).
It’s (currently - they’ve dropped it back a few times) going to be compulsory from the 2023-24 tax year, but you can sign up now if you want to be a gineau pig!
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Pandle looks interesting. I’ll have a proper look when I get home from work. Thanks
Good point Mike but seems a bit much to me for a single property.