Should we get a text accountant??

crispy71

I earn £65k, my partner £24k. We have one house we live in and a flat we are trying to rent out for £400pcm. We have two mortgages, totalling approx £190k (£120k for the house £70k for the flat). In a usual year we would get approx bonus of £6k (me) £2k (partner) take home. We both have our own cars which we do limited work mileage (approx 1500 miles a year between us). We have one daughter who is 14. I have recently been signed to an incentive plan which will give me approx £10k of shares a year.

Debts are approx £25k. Would we benefit by getting a tax accountant? At present we pay taxes PAYE.

taxdoctor

Hi Crispy,

I suppose the best response to your question is "How much do you understand the tax process and how much do you feel comfortable with doing yourself?"

As you are about to begin letting out a property you will need to complete tax returns showing this information along with your other income.

HMRC have changed the way tax returns work a little this year, supposedly to simplify them for people in your situation (whether that has actually been achieved will remain to be seen)

You do have a few things going on and there is no doubt that it will be easier to to pass everything over to a specialist and if you pick the right one they will usually save you as much as your fee.

It might be a good idea to talk to a couple of local accountants and see if they will provide you with a free consultation you can then see what they will do for you.

Good luck!

crispy71

Thanks for your help.

If we are getting the same for rent as we pay in the mortgage do we still need to pay tax on the rental?

fengirl_2

You only get relief for the interest paid on the mortage, not the whole lot. Therefore if you pay £3000 interest and get £4000 in rent, you pay tax on £1000 - but make sure you claim all the other outgoings on the property.

taxdoctor

Fengirl is spot on Crispy.

The Revenue will not give tax relief on the repayment element of the mortgage as in effect you are just repaying the loan you have taken out.

The interest is the only real "expense"

nomoneytoday

I would pay £200 and have a meeting with an Accountant. They will be able to advise you further from that point as to what is required

Timmne

Any accountant worth their salt will save you more than they charge, if they're working for you from a tax planning angle. If they're doing year end accounts, it's a whole other matter.

I'm currently working on a project for a client billing £300 per day and it's going to take me 15-20 days to complete. When I'm done, the company will have massive value added areas to the services they offer, they'll be up to date with accounting and I have trimmed certain areas of their expenditure (well not trimmed, directed differently!) to reduce their tax bill. All legally obviously, before anyone suggests otherwise!

An initial meeting will cost nothing and don't worry about asking them outright whether they plan to save you anything in tax, as some will just do the work for you lemming-style....

HTH