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There are plenty of factors to take into account if you want to become a successful buy-to-let landlord, but one that often gets overlooked is tax efficiency. Putting a few tax saving strategies for landlords in place may not be quite as glamorous as hunting down the perfect property, but when it comes to saving cash it can make a huge difference to your bottom line. That’s why we thought it would be a good idea to share a few tax saving tips for landlords with you here on our blog. Armed with these simple bits of advice, you’ll be able to significantly (and legally) reduce your tax bill as a landlord, which will help get your buy-to-let business in better shape in time for next year’s tax return. Set up a limited company: While it might require some planning creating the company as a limited company is an excellent way to lower the tax burden of landlord. In addition, you’ll be able buy properties by way of the business (which allows you to offset the cost against your profits) Additionally, you’ll be able to engage you or someone else to oversee the properties that are part of the portfolio. This particular tax-saving technique isn’t suitable for all however, if it does work for you, the savings could be huge. Contact Account Ease to see whether you could benefit from the transfer of your property to an LLC. Extend to reduce: Putting money into your existing properties will help you avoid hefty stamp duty charges and should see the value of your portfolio rise at the same time. Recent changes to development rights means that you are now able to extend the property you have in place more than you did previously and this should result in an increase in your monthly earnings. If you consider the cost of the region where your rental property is located, substantial benefits can be realized by the expansion or extension of your property. A thing to keep in mind is that if undertaking significant changes that will increase occupancy, you could be affected by the forthcoming revisions to HMO regulations. In October (2017) properties that has 5 plus tenants is going to have to obtain an HMO license, which means passing the required inspections and committing to the expense of obtaining a licence as well. Therefore, make sure you examine the local council’s licensing regulations prior to undertaking any costly building project that could cause a change in the status of your rental property. Make use of all available tax bands Another option to cut the tax burden of landlord is to transfer your property into your partner. Capital Gains Tax generally is not a concern when assets are shared between spouses, which means you can effectively take advantage of their tax rates that are lower. It is also possible that you’ll be in a position to pay less tax on the rental income if their tax bracket is less than your own. If the property isn’t a home with a mortgage to it and you’re not gaining any financial benefits from the transfer, then you don’t need to pay stamp duty. Make sure you are getting the most from your property This may seem like a bit of a no brainer at face value, but you’d be amazed at just how much money is left on the table each and every year by landlords who do not have their rental properties reassessed. Getting your rental property revalued can make a huge difference, not only in terms of how much it is worth, but also the way in which your business is viewed by outsiders. Having a more accurate assessment of how much your rental property is worth will strengthen your hand against lenders and get them to reevaluate your loan to value. Should your rental property price increase, your loan to value will obviously go down…and that could mean more choice and a better interest rate for your buy-to-let business. If you would like an accurate assessment of your property’s value, give our valuers a call on 0208 133 4599 to get started. Don’t be shy with your expenses Now, obviously we’re not suggesting anything untoward here, but we do recommend that you claim everything you are entitled to if you want to become a tax efficient landlord. There are plenty of landlords who could reduce their tax bills simply by being a little more diligent about their expenses, so our advice is to make sure you claim for everything. Keep every receipt and speak to your tax advisor or accountant about exactly what you can and cannot claim for…you’ll likely be surprised by how quickly these landlord expenses mount up! For example, things such as the costs of keeping a home office and your letting agent’s fees can all be offset against your profits, so why not claim for them? Consider short-term lets If you are in between tenants, there are ways in which you can lower your landlord tax bill. Costs such as your council tax and utilities can all be claimed as expenses during this time, but wouldn’t you rather be earning money rather than saving? Sometimes it can be worth considering the option of taking on a short-term let during a void period in order to get some money coming in. As ever, if you are based in East London or West Essex, we’d be delighted to assist, so give our lettings team a call on 020 8989 2091 today. Be savvy when you sell Too often, landlords lose money when they sell a rental property simply because they do not take full advantage of the available tax relief on offer to them. This is especially true of landlords with multiple properties, as they can reap the benefits of the 0% Capital Gains Tax band each and every year should they decide to sell one of their homes. Currently, the tax free figure stands at £11,300, which is a pretty good saving

Running a successful sole trader business requires a lot of dedication and hard work. As a sole trader, you are responsible for all aspects of your business, including bookkeeping. While it may seem overwhelming, bookkeeping is an essential part of managing your business finances and ensuring compliance with tax laws. In this guide, we will explore the importance of bookkeeping for sole traders and provide practical tips on how to set up an effective bookkeeping system. Whether you’re a seasoned sole trader or just starting out, this guide will help you navigate the world of bookkeeping and make informed financial decisions for your business. Understanding the Importance of Bookkeeping for Sole Traders Bookkeeping is an essential aspect of running a successful sole trader business. Accurate bookkeeping provides a clear picture of your business finances. Without proper bookkeeping, it becomes challenging to track your business expenses and income accurately. As a result, you may miss out on potential tax deductions and overstate your profits. With accurate bookkeeping, you can analyze your financial data to make informed business decisions. Bookkeeping helps you keep track of your business expenses and income. By maintaining a detailed record of your expenses and income, you can easily monitor where your money is going and identify areas where you can save costs. This knowledge helps you optimize your spending and increase your profitability. Proper bookkeeping ensures compliance with tax laws and regulations. As a sole trader, you are responsible for reporting your income and expenses accurately to the tax authorities. Failing to do so can result in penalties and legal consequences. Bookkeeping allows you to maintain all the necessary records and documentation required for tax purposes. Without bookkeeping, it is difficult to make informed financial decisions. Bookkeeping provides you with up-to-date financial information, allowing you to evaluate your business’s performance and make strategic decisions. You can assess your cash flow, identify trends, and plan for future growth. Choosing the Right Bookkeeper for Your Business When it comes to bookkeeping for your sole trader business, it’s crucial to find a bookkeeper who can meet your specific needs. Here are some tips for choosing the right bookkeeper: Consider the qualifications and experience of potential bookkeepers Look for bookkeepers who have relevant qualifications and experience in working with sole traders. This ensures they understand the unique challenges and requirements of your business. Ask for referrals and check reviews Reach out to other sole traders or small business owners for recommendations on bookkeepers they trust. Additionally, check online reviews and testimonials to get a sense of a bookkeeper’s reputation. Choose a bookkeeper who understands your needs It’s important to select a bookkeeper who takes the time to understand your business goals and financial needs. This understanding will help them provide tailored bookkeeping services. Ensure the bookkeeper uses modern bookkeeping software and technologies Find out what bookkeeping software and technologies the bookkeeper utilizes. It’s essential to work with someone who keeps up with industry advancements to streamline your bookkeeping processes. Discuss pricing and payment terms Before finalizing your decision, have a conversation with potential bookkeepers about their pricing structure and payment terms. Make sure it aligns with your budget and preferences. Setting up an Effective Bookkeeping System When it comes to bookkeeping for sole traders, setting up an effective system is crucial for maintaining organized and accurate financial records. Here are some steps to help you establish a reliable bookkeeping system: Create a separate bank account for your business transactions:  Having a dedicated bank account for your business will make it easier to track expenses and income. Establish a consistent record-keeping system: Create a system for organizing invoices, receipts, and expenses. This could include using folders or digital folders to store and categorize your financial documents. Set up a digital or physical filing system: Choose whether you prefer to keep your records digitally or in physical files. Whichever option you choose, make sure it is organized and easy to access. Consider using cloud-based bookkeeping software: Cloud-based software offers the convenience of accessing your financial records from anywhere and provides automatic backup for data loss prevention. Implement regular backups: Regularly backup your bookkeeping files to a secure location to ensure you don’t lose any important data. By following these steps, you can establish a solid foundation for your bookkeeping system, making it easier to stay organized and maintain accurate financial records for your sole trader business. Organizing and Sorting Your Business Expenses Properly organizing and sorting your business expenses is crucial for accurate bookkeeping. Here are some tips to help you effectively manage your expenses: Categorize your business expenses into different expense types By categorizing your expenses, you can easily track and analyze your spending. Common expense categories include office supplies, travel expenses, utilities, and marketing expenses. Create a comprehensive list of expense categories that best reflect your business’s needs. Keep detailed records of each expense, including receipts and invoices It’s essential to have supporting documentation for every expense. Keep all receipts, invoices, and payment records organized and easily accessible. This will help you during tax season and provide proof of expenses if needed. Regularly review and reconcile your expense records to ensure accuracy Set aside time each month to review and reconcile your expense records. Check that all expenses are correctly categorized, and resolve any discrepancies or errors. This practice will help maintain accurate financial records. Consider using expense tracking tools or apps to simplify the process There are various expense tracking tools and apps available that can automate and simplify expense management. Find one that suits your business’s needs and integrates with your bookkeeping software for seamless data transfer. Consult with a bookkeeper to ensure you are correctly classifying your expenses If you’re uncertain about how to classify certain expenses, seek guidance from a professional bookkeeper. They can provide valuable insights and ensure your expenses are properly categorized for accurate financial reporting. Tracking and Recording Your Business Income Properly tracking and recording your business income is essential for maintaining accurate

What’s the reason for Tax Digital? Making Tax Digital (MTD) is designed to make it simpler as well as more effective for companies as well as individuals to track and report the tax they owe to HMRC. In the new regulations, HMRC legally requires businesses that are eligible to keep records of transactions electronically and send tax returns to HMRC with Making Tax Digital compatible software. The new rules won’t affect the normal deadlines for VAT returns or the information you have to provide. You can find out the date your next tax return is due by checking the on-line VAT account. What information must be kept digitally? MTD can alter your bookkeeping process as well as the way your business records data. It is essential to be able to keep digital records and the digital copy of your transactions. Further information on the records you have to keep in digital format on the website of HMRC. I already keep digital records. What’s different about Making Tax Digital for VAT?  Every VAT-registered business must keep books, records and accounts Most are maintaining these electronically. With MTD the most significant change is that you will need to make use of the Making Tax Digital software to file your VAT return with HMRC. Here’s what you’ll need to do in order to be compliant with the new law so that you don’t get caught with penalties for not complying. Create a strategy It’s time to be clear about your strategy. In the event that you’ve got an accountant looking for your bookkeeping, talk with them about what the changes will mean. For instance, you might have to establish an approach to share data and records in digital format. If you manage your own accounts with spreadsheets, manual records or paper-based bookkeeping, or if you’re keeping your financial records digitally, you’ll need to utilize MTD suitable programs to upload your data to the brand HMRC website. What software is compatible? It is essential to preserve your records digitally using the VAT-compliant software that integrates with HMRC systems. Enables users to keep and update records such as VAT receipts and invoices electronically. The item has to be capable of: Keep and archive digital records as required by the regulations. make VAT returns using these documents Connect with HMRC via an electronic link Certain MTD solutions include the ability to bridge. Which allows you to digitally connect the data from a spreadsheet into HMRC’s system. Selecting MTD compatible software You won’t be registered for VAT MTD immediately. This procedure instructs HMRC to move your current VAT accounts from the previous HMRC computer system and transfer it into the current MTD computers. After you have completed this step, it may be HMRC as long as 72 hours in order to copy your account over. It’s a one-time procedure that takes about three hours in total. To join you’ll need the following items on hand: Your business email address Government Gateway user ID and password ( if you don’t have one, you can make new account) VAT registration number The most recent VAT return Is Tax Making Digital Only in relation to VAT? No. from April 2026, self employed landlords and individuals with earnings of more than  £50,000 will need to keep electronic documents. Report quarterly reports on their expenditure and income to HMRC via MTD-compatible software. Those earning between  £30,000 and  £50,000 will have to start this process beginning in April 2027. HMRC includes an online webinar that you can view online to find out more about the procedure and how to join this Making Tax Digital for Income Tax Self-Assessment Pilot. HMRC is also provides helpful videos. Resources and webinars targeted at entrepreneurs to find out more about how you’ll be affected and what actions you’ll need to follow.

There’s a lot to juggle as a sole trader in the UK, and a solid accounting foundation is just as important for sole traders as it is for larger businesses. As a sole trader, you need not only to  provide services in your area of expertise, but also to handle marketing and manage your own financial accounts such as recording expenses and tracking income. Fortunately, UK sole trader accounting software can help you stay organised. The best sole trader accounting software can help you keep accurate records, making it easier to submit your    to HMRC each year. Here we cover what to look for in the best accounting software for sole traders, and present our pick of the six best accounting apps for sole traders. Why should you use sole trader accounting software? If you’re a sole trader, you might find that there isn’t enough time in the day. The manual entry of every sole trader’s details for accounting and bookkeeping into spreadsheets can take hours every week, especially if you handle a large number of transactions. Accounting software for sole traders is specifically designed to help save your time as well as money, by automating keeping track of expenses, creating invoices, and reconciling bank accounts. Here are some benefits of the top software for accounting sole traders: It stores all of your essential information about sole trader bookkeeping in one location and ensures that no receipts go out of your hands. It will automatically track expenses and reduce the tax burden. It decreases the chance of human error. It aids in forecasting the flow of cash It helps you stay on the right side of tax on sole trader obligations Accounting considerations for sole traders Any sole trader accounting software can be used, but be aware of your unique tax considerations. One of the main benefits of being registered with HMRC as sole trader is that you do not need to stress about filling in annual accounts or filing corporate tax returns. The registration is completely free and you don’t have to adhere to the same rules as a limited company. This helps cut down on paperwork.   However sole traders must fulfill certain obligations Keep accurate records of all invoices and other expenses Send Tax returns for self-assessment With the most effective accountant for sole traders, it’s possible to hit the goals and remain in the forefront of tax compliance concerns. Best sole trader accounting software The self-employed have a lot of options when it comes to selecting one of the accounting software for sole trader. Here are our six most popular choices: Xero Xero is an all-purpose cloud-based accounting software that was created in the year 2006. It’s loaded with features that can benefit small-sized companies, as well as sole traders. While there are a variety of plans available but the Starter Plan at just PS12 per month is ideal for the majority of sole traders. It includes everything you need to keep your accounts up-to date and to file tax returns. One of the potential drawbacks that comes with this Starter Plan is the 20 invoices per month limitation, meaning you’ll need to keep an the workload in check in the event that you have to upgrade. There are other advantages, though, such as: Access from any location mobility on the go multiple payments processors Tracking inventory automatic report generation Sage Sage Business Cloud Accounting is an ideal choice for people with no accounting experience. It is setup quickly, and if you’ve got any concerns, Sage has 24/7 support via phone and online. Similar to Xero. The Basic Accounting Start Plan will suit the requirements of a majority of sole traders. It cost of PS12 per month, however it could be a problem for those who have higher work loads. It comes with tools for calculating your tax returns for VAT, if applicable. Other benefits include: Create and create invoices and reconcile bank accounts Track payments VAT submission KashFlow KashFlow is designed in making the accounting process as simple as is possible for sole traders and freelancers. The user-friendly dashboard gives you the most comprehensive overview of your financial position and integrates with a variety of apps, including the most popular e-commerce platforms such as Amazon as well as Shopify. It’s also perfect to expand as your business expands but you’ll eventually have to upgrade to the Starter plan, which costs $9 per month. This is only able to send 10 invoices per month. If you’re still not convinced you should give it a go initially for free. The benefits include: easy to setup Work from any location automatic updates to VAT Tax assistance FreeAgent With a starter plan of PS19 per month specifically made to cater for entrepreneurs who are sole proprietors, FreeAgent includes all the tools you require to maintain your finances in order. The standard features include a selection of eight invoice templates that are professional as well as time tracking sheets to assist with invoices and expense tracking that is automated directly through a live feed of your bank. Additionally, you can utilize the application to fill in and submit your Self-Assessment Return. Invoicing cost tracking self-assessment Profit share calculation QuickBooks QuickBooks is among the most popular business accounting software applications, and is equally useful for solo traders, as well to larger businesses. It’s user-friendly at any level, and it comes with a Simple Start Plan for PS12 per month gives you everything you require to monitor the flow of cash and ensure that your taxes are organized. You can also track sent invoices and chase late payments to boost the flow of cash. Tracking of expenses and income Join multiple accounts at one time invoice tracking Tax assistance Zoho Books Zoho Books is another one of the top accounting software designed for sole traders. It includes a 14-day trial period of the program. There are a lot of reporting features that are available, as well as the capability to monitor the total cost of expenses and keep track of invoices, so you are aware of what your cash flow is and how it