Admin of rental property

meemawuk

I have a rental property which is looked after by a letting agent.

My mother is currently retired, but I was thinking about paying her to deal with the admin side of things like keeping my accounts etc and dealing with the letting agent, as she worked in banking her whole life.

Does anyone know if this would be an allowable expense? Would I need to be registered somewhere as employing her? Or just keep records of payments made to her?

Comms69

You would need to provide Holiday pay, works pension, sick pay, etc.


Or she could be 'self employed'


In either case, I don't see the benefit of this?

need_an_answer

I'm very interested in knowing how much you would pay her.
Can I apply for the job?

It would seem that you are perhaps trying to engineer an expense,you already pay a letting agent and now you want to employ a middle person to relay details back to you.

Seems a weak sort of allowable expense in my mind either that or as a LL you are earning far too much!

not often I would make that comment being a LL myself!

G_M

If you employ her, then arguably it's an allowabole expense. as others have pointed out, you'd have to comply witth all employment law, and she'd have to declre her earnings.

And even then HMRC might disallow it as you already have an agent.

Why not sack the agent and have your mother do the whole job - properly?

meemawuk

Part of my rationale is that with changing tax laws, im going to be drifting into the 40% tax bracket, and I!!!8217;d rather see my mum get the money than the tax man.

But it would honestly help me out. My agent works office hours as do I and it often means a 2 day sometimes longer turnaround for my tenants if they need something fixed which isn!!!8217;t ideal. My mum could deal with that immediately. And also help me with my self assessment and keep track of other expenses. She wouldn!!!8217;t be knowledgable enough to market a property, reference check tenants and undertake the inventory to the level that my agent does.

Any thoughts or is it not worth the hassle?

00ec25

meemawuk wrote: »

Any thoughts or is it not worth the hassle?

in principle it is perfectly acceptable to employ a relative to do the admin associated with your rental business. It would also be very tax efficient for you, as you already realise being a HR taxpayer yourself.


the answers above have already pointed to the key pitfalls:
- the rate of pay must be commensurate with the "value" of the work done (no £100 per hour for mere bookkeeping )

- claiming your mother was self employed would instantly fail the "disguised employee" tests since your mother would not be trading as a letting agent in her own right with clients other than you.

- your mother would be your employee. Pay her more than £113 per week (15 hours 4 minutes at national minimum wage) and you will need to operate a PAYE scheme with all the reporting requirements that come with it.

- pay less than £113 (but at least at minimum wage obviously) and you will need to keep payroll records and account for tax to HMRC but you will need to sort out the practicalities of that yourself direct with them. If mother is old enough (?) you may escape having to make national insurance deductions as they have lower thresholds than income tax but do not apply if the employee is above state retirement age,..

- you must physically pay the cash to mother. It cannot be a book entry only, the money must leave your bank account.

- as mother is retired you may (check yourself) escape the requirements of auto enrolment of her into a pension scheme (depends on her age and other criteria)

- mother will need a documented contract of employment that sets out her responsibilities (obviously weasel words can be used such as "any other duties as the need arises")

as a final thought - if you have a mortgage on the property make sure you have done your sums fully because the impact of the change in how mortgage interest is applied for higher rate taxpayers will almost certainly eclipse any trivial sum you can pay your mother.