Letting expenses - accountant

BPauseMSE

I require to complete a self assessment tax return for the income from my rental property (employment taxes paid through employer and PAYE etc., but I don't want to mix them).  I pay an accountant to do this for me - is this an allowable expense for my tax return?

anselld

Yes it is allowable, but it is relatively simple if you want to do it yourself.

You can't "not mix them"; once you start doing self-assessment it needs to include income from all sources even if it is under PAYE. 

Dazed_and_C0nfused

BPauseMSE said:

I require to complete a self assessment tax return for the income from my rental property (employment taxes paid through employer and PAYE etc., but I don't want to mix them).  I pay an accountant to do this for me - is this an allowable expense for my tax return?

Your tax return is for all taxable income, you don't get to pick and choose what to include!

You should take careful note of two questions near the end of the return relating to,

A.  How any tax owed for 2023-24 should be collected

B.  If you are happy to have information from your 2023-24 return used in keeping your current (2024-25) tax code as upto date as possible.  This one is not about how you pay any tax owed for 2023-24.

Make sure you understand those before submitting the return.

Bookworm105

if your accountant gives you an invoice which shows charges split between preparing the rental profit calculation and preparing the tax return you can claim the rental aspect only as a cost of the rental business. You cannot claim the tax return aspect as submitting a tax return is a personal expense no matter what sources of income it includes.

if the accountant's cost is not split then you cannot claim any of it. Charges for doing a tax return is not a deduction against personal tax as it is not "wholly and exclusively" business related, it's personal!

a more grey scenario would be the accountant billing for a single total for the rental business work and a "free" personal tax return thrown in. That would be down to the accountant's own professional indemnity insurance to cover if claimed in full!

Grumpy_chap

BPauseMSE said:

I require to complete a self assessment tax return for the income from my rental property (employment taxes paid through employer and PAYE etc., but I don't want to mix them).  I pay an accountant to do this for me - is this an allowable expense for my tax return?

The Accountant should be able to proportion the effort (costs) appropriately and show the various components suitably in the invoice to support the allowable expenses in so far as they are allowable.
You have to go with the advice of the Accountant as they have the necessary PI cover to back up any split that is advised.
You may need to prompt the Accountant to advise and include as appropriate any of their fee that is allowable.

silvercar

Arguably, you wouldn’t need an accountant at all if you only other income source was PAYE!

Phoenix72

silvercar said:

Arguably, you wouldn’t need an accountant at all if you only other income source was PAYE!

You'd be amazed at the number of people who pay an accountant to transfer figures from a P60/P11d onto a tax return

silvercar

https://forums.moneysavingexpert.com/discussion/comment/71220191#Comment_71220191?utm_source=community-search&utm_medium=organic-search&utm_term=accountant+fees+expense

https://forums.moneysavingexpert.com/discussion/comment/76079541#Comment_76079541?utm_source=community-search&utm_medium=organic-search&utm_term=accountant+fees+expense

https://totalaccounting.co.uk/expenses-you-can-set-off-against-rental-income/

I’d ask on the tax board, lots of accountants post on there, who don’t float over to here.

personally I would think that the actual tax return for the PAYE element is minimal, so the cost is occurred because of the rental business.

BPauseMSE

Dazed_and_C0nfused said:

BPauseMSE said:

I require to complete a self assessment tax return for the income from my rental property (employment taxes paid through employer and PAYE etc., but I don't want to mix them).  I pay an accountant to do this for me - is this an allowable expense for my tax return?

Your tax return is for all taxable income, you don't get to pick and choose what to include!

You should take careful note of two questions near the end of the return relating to,

A.  How any tax owed for 2023-24 should be collected

B.  If you are happy to have information from your 2023-24 return used in keeping your current (2024-25) tax code as upto date as possible.  This one is not about how you pay any tax owed for 2023-24.

Make sure you understand those before submitting the return.

Thanks and sorry I was not clear - I declare all income on tax return but pay tax element for that not taken through PAYE separately as I prefer to not be in debt for tax and don't want my PAYE constantly changing.  I'm happy with this and just wondered if the cost of accountant doing tax return was an allowable expense but can see from other responses that this is not the case.

BPauseMSE

silvercar said:

Arguably, you wouldn’t need an accountant at all if you only other income source was PAYE!

I just like to make sure it is correct and that is why I use accountant.  I guess I could try myself now that accountant has done for a couple of years and I can see the logic he uses, but I guess he keeps updated with allowable expenses etc. given it is his area of work.

silvercar

BPauseMSE said:

silvercar said:

Arguably, you wouldn’t need an accountant at all if you only other income source was PAYE!

I just like to make sure it is correct and that is why I use accountant.  I guess I could try myself now that accountant has done for a couple of years and I can see the logic he uses, but I guess he keeps updated with allowable expenses etc. given it is his area of work.

I’m justifying the cost of the accountant being a business expense, by the fact that if your only income was PAYE you wouldn’t have an accountant. As proven by the fact that the vast majority of PAYE earners in the UK don’t use an accountant.