And a further 10% of landlords are considering using an accountant in the future. Full-time landlords were more likely to have always used an accountant. While three-quarters of full-time landlords currently use an accountant, one in four (29%) said they had just started using one.
Over half (58%) of landlords are involving accountants when making key property decisions – a clear sign of the growing professionalisation of the sector, Kent Reliance for Intermediaries has found.
And a further 10% of landlords are considering using an accountant in the future. Full-time landlords were more likely to have always used an accountant. While three-quarters of full-time landlords currently use an accountant (click here if you want to hire one), one in four (29%) said they had just started using one.
Adrian Moloney, sales director at OneSavings Bank, said: “This is clear evidence of the growing professionalisation of the sector. As portfolio and full-time landlords take more of the market share, we could see the use of professionals like accountants increase further.
“This is good news for the sector as landlords have the benefit of access to even more advice ahead of key property decisions, particularly on the tax implications.
“More landlords are making the move into a limited company structure to help offset the effects of recent tax changes. This requires more detailed accounts as well as professional tax advice, the latter, in particular is where the accountant comes in.
“Whilst brokers play a pivotal role in advising their client, they should not be giving tax advice. Should a client want to move into a limited company, a broker should advise them to seek the help of an accountant as a first step.” Many times, people's ignorance about accounting has led to problems. As information is instant today through website link and online platforms, everyone should be aware of financial basics.
Recent changes to the tax treatment of landlords may be one reason behind the increasing use of accountants- read this for more info on the same.
According to previous research from Kent Reliance for Intermediaries and BVA BDRC in January 2018, one in five (19%) landlords had recently set up a limited company in order to offset changes to the tax treatment of buy-to-let.
Operating through a limited company requires a higher level of detail in the accounts and therefore a broker would always advise the landlord to enlist the help of an accountant.
Landlords affected by recent tax changes are also more likely to be looking to diversify away from ‘vanilla’ buy-to-let into often higher yielding options such as HMOs, student accommodation or commercial/semi-commercial properties.
Our research, for example, found that 51% of brokers had been approached by landlords looking to diversify; 56% into HMOs, 14% into commercial property and 9% into mixed use.
Again, these are more complex cases where a landlord would be advised to seek professional guidance from an accountant by the broker to ensure correct paperwork submission and tax calculations.
