tradeing accounts

KristianB

Hi All,

I wonder if someone could help me out with this probably very simple thing.

I recently become a landlord and I still have a full time job.
We do it together with my girlfriend as a business, she does it in full time as a sole trader. We haven’t set up a ltd company as yet because we won’t make any profit this year.
We have set up a separate bank account for the property incomes and outgoings on her name.
We already use a company name and website but only for marketing purposes.

I do a lot of refurb and furnishing on the properties hence I would like to open trading accounts at stores like B&Q, Stax, etc. to take advantage of their good prices.
They want me to prove that I am a trader with utility bills / letters on my trading name. Which I don’t have, all my utility bills are on my name or on my girlfriend’s name.

My question is how do I get utility bills on my/her trader name?
She operates as a sole trader and all property related bills come under her name.

Hope this makes sense.

Many thanks in advance for any advice.

Kristian

G_M

If you are trading under a trading name, then surely you have headed notepaper, receipt slips, namecards, accounts (including bank, utilities etc) in your business name?

If not, then it kind of begs the question - are you really trading under your 'trading' name?

kinger101

Have you spoken to account about the pros and cons of operating as a limited company. And the tax implications of transferring the property? I'm a bit confused about what you've posted to be honest. If you're in business together, one of you can't be a sole trader. Any renting out a property which you do not occupy wouldn't be classified as a trade by HMRC.

Whatever is happening, don't switch to operating as a company just for the purpose of getting a discount on a tin of trade emulsion.

anselld

Most of these places accept business card and headed paper which are easy enough to knock up on a computer/printer.

You need to be a bit careful about terms like sole trader though.

Letting property is not considered to be a trading business (unless it is holiday lets); it is an investment. Hence on the tax return the income is declared as 'Property Income' not Self Employment.

Also, you cannot simply treat incomes as hers unless she actually has a beneficial interest (i.e. some ownership) of the property.

It sounds like you need some serious taxation/accounting advice more urgently than a trade account at B&Q.

Incidentally, it seems that membership of the RLA comes with an automatic Tradepoint account now, amongst other useful benefits.

kinger101

This might be worth your perusal;

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11221498/Im-a-buy-to-let-investor-could-I-pay-less-tax-by-setting-up-a-limited-company.html

I should forewarn you though that some of these rules may have changed since the article was written. There is a tax forum on here which might be a more appropriate place for this question.

KristianB

Thanks for all the comments.

Fair enough, I wasn’t particularly clear about the ’business’.

We don’t own the properties, we lease them or manage them as a letting agency. Then we rent them out by room, manage the tenants and maintain the property. This is my girlfriend’s full time job now. I just help out to build the business and manage the refurbs in my spare time.

The refurbs and furnishing cost typically circa £5,000 to £20,000 per property. This is where I believe I can gain by shopping about at trade prices.

We have been advised by our accountant that we should only incorporate the business and operate as a limited company once our profits hit the high tax bracket (over £41k)
It is certainly not gonna happen this year due to the refurb and other business related expenses.

So what I am asking is that How do open trade accounts at the retailers? They want proof of trading by producing utility bills or bank statements on the trade name.
All bills are on our private names.

Again, many thanks for all the comments.

Mallotum_X

As you are trading the surely you have a bank account. Very easy to set up a business bank account even if not a limited company.

Your accountant should have told you it's best to have a dedicated account, you also need to tell the tax man you are self employed.

A bank account, tax reference and a letter from your accountant should be good enough.

Limited company status for why you are doing offers protection, not just a tax consideration.

As the leases are in your names it won't be that simple to transfer to a ltd company the owners of the properties could demand arrangement fees and legal fees to allow you to transfer them.

Do you have appropriate insurance (again should be in the business name) or if not can you afford to pay out a potentially multi million pound settlement if one of your tenants has an accident that you can be help responsible for.

I would see a better accountant before doing much more, the one you have isn't giving you much help. You will of course need to pay for good advice.