Landlords need to run property investments as a business

Landlords need to look at putting their property investments on a business footing as HM Revenue & Customs and local councils crack down on compliance.

HMRC has launched several task forces targeting landlords suspected of under declaring rental income.

Out of 1.4 million landlords, only around 500,000 are filing regular returns while the rest lie low hoping they remain unnoticed, says HMRC.

Meanwhile, councils are queuing up to licence buy to let homes and make sure landlords not only keep their properties to a high standard, but pay their tax dues as well through accreditation schemes.

Newham and Waltham Forest in East London, Liverpool and the Welsh Assembly Government are licensing and vetting hundreds of thousands of buy to let properties and making sure their owners are ‘fit and proper’ landlords.

With this in mind, Property Tax for Landlords (propertytaxforlandlords.co.uk) has set up a new tax information web site and launched a property tax calculator for landlords.

The calculator comes as a simple Excel 2007 or 2010 spreadsheet, loads no software to a computer and keeps accounts and provides tax calculations for four owners with an unlimited portfolio of properties.

The calculator handles buy to lets, houses in multiple occupation (HMOs), holiday lets and semi-commercial property.

The landlord software also comes with a plain language step-by-step guide and details of how to claim rental property expenses.

“The idea is to empower landlords and to help them run their rental portfolios as a business,” said Steve Sims, of Property Tax for Landlords.

“Too many pay too much tax because they do not know how to keep financial records or claim the right business expenses.”

Steve Sims is also the author of the bestselling Understanding and Paying Less Property Tax for Dummies, part of the successful Wiley yellow and black Dummies’ guides.