I'm new to the whole self-employed got to do something with all these bits of paper type thing - and am not quite sure how to go about it as normally my other half takes care of it, but he's got a new venture that has unexpectedly taken off and is now away a lot, so I'm rather left holding the baby - or invoices and receipts in this case.
Should I be doing some sort of course?
We've got three lets - one will definitely qualify for FHL status - not sure yet about the other two - so how would what I need to do for them differ?
What are the dates I need to send things to the taxman etc ?
Is excel enough to manage this on, or should I be getting something else?
Do I definitely need an accountant for this? We have one at the moment who used to deal with my other half's old business but that was rather larger and I think this is all a bit small fry for him so not sure if we should or not or would be better off going to someone who specialises in this area.
Any help/advice/tips welcomed.
Am currently sitting with a massive pile of invoices and receipts in front of me and feeding them into excel.... Am I supposed to be doing them quarterly/annually.....think my brain may explode with questions...this is rather a career change for me so a bit different to me just being handed a payslip once a month!
Sorry for the waffling length of that! Feeling a bit rabbit in the headlights!
FHL & Accounts in general
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Joanna
- Posts: 1091
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If your OH has a share in the holiday let business (joint mortgage or you jointly own the property?) and already has an accountant then it's worth talking to the accountant. Although the HL may be small fry there could be implications for your OH.
I do all the admin and marketing, but we jointly own our cottages and in the early days when they made a loss OH 'benefited' from half the loss which reduced his tax bill slightly. Now we share the profit, such as it is
Having said that, FHLs were unfamiliar territory for our accountant and he had to do a lot of research to get up to speed. We stuck with him because he handles OH's partnership accounts and my freelance accounts and so, in theory, he has the big picture.
I just send him my spreadsheets once a year, usually in the summer, and he prepares the year end statement from them.
I do everything for our 2 cottages in Excel, 1 spreadsheet for each - as advised by the accountant, so it's easy to see how the cottages do individually. But in the end they are treated as a single FHL business.
I update the spreadsheets and reconcile them with their corresponding bank accounts at least once a week.
I did look into using Quickbooks but it was a big difference from Excel and I wasn't sure if the time I spent learning it would be worth it with only 2 cottages.
Plus I've got my spreadsheets working quite well for me - I've set up pivot tables which produce charts for month on month turnover, expenses, accumulated turnover over the year compared to previous years, etc. If you're familiar with Excel it's pretty good.
If you're starting from scratch and not particularly into Excel then it's worth getting a demo of one of the small business accounting packages before you invest a lot of time into your spreadsheets - you might end up having to re-enter all those figures again if you switch later.
I do all the admin and marketing, but we jointly own our cottages and in the early days when they made a loss OH 'benefited' from half the loss which reduced his tax bill slightly. Now we share the profit, such as it is
Having said that, FHLs were unfamiliar territory for our accountant and he had to do a lot of research to get up to speed. We stuck with him because he handles OH's partnership accounts and my freelance accounts and so, in theory, he has the big picture.
I just send him my spreadsheets once a year, usually in the summer, and he prepares the year end statement from them.
I do everything for our 2 cottages in Excel, 1 spreadsheet for each - as advised by the accountant, so it's easy to see how the cottages do individually. But in the end they are treated as a single FHL business.
I update the spreadsheets and reconcile them with their corresponding bank accounts at least once a week.
I did look into using Quickbooks but it was a big difference from Excel and I wasn't sure if the time I spent learning it would be worth it with only 2 cottages.
Plus I've got my spreadsheets working quite well for me - I've set up pivot tables which produce charts for month on month turnover, expenses, accumulated turnover over the year compared to previous years, etc. If you're familiar with Excel it's pretty good.
If you're starting from scratch and not particularly into Excel then it's worth getting a demo of one of the small business accounting packages before you invest a lot of time into your spreadsheets - you might end up having to re-enter all those figures again if you switch later.
Jo
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
That is very interesting Joanna about the 'loss' being part of the bigger picture! I'm not on any paperwork at the moment, which we'll be sorting later in the year, I just get to deal with it all now!
At least it's reassuring I can still to excel, as I can manage that and it's only once a year. We just had to send in a quarterly VAT return for something else so I was worried it was going to be like that all over again!
At least it's reassuring I can still to excel, as I can manage that and it's only once a year. We just had to send in a quarterly VAT return for something else so I was worried it was going to be like that all over again!
Re: FHL & Accounts in general
Yes.Jester wrote: Do I definitely need an accountant for this?
...... someone who specialises in this area.
The questions you're asking show that you need an accountant, and one who knows the FHL business, without necessarily specialising. He/she can advise you what to do and how to record it - remember they've got to make sense out of whatever you send, the harder that is the more they'll charge. I'd imagine it's handy to have everything under one roof for the overall picture (although you can no longer offset FHL losses against other income) so using one accountant seems like a good notion - unless they're very expensive of course! Maybe your OH's existing accountant has someone else at the practice who knows the FHL business?
I get the feeling from my other half that his accountant is rather pricy, so I'm not sure if he's even going to stay with him.
I'm reading up on all this today and learning about the allowable expenses. The accountant has given me info on what information he needs to do his job, so that's helped me a lot.
Hopefully my other half may actually be home long enough between jobs to answer the ton of questions I have!
I'm reading up on all this today and learning about the allowable expenses. The accountant has given me info on what information he needs to do his job, so that's helped me a lot.
Hopefully my other half may actually be home long enough between jobs to answer the ton of questions I have!
I don't think anyone can better 7Aspires response!
All I would say is do as much as you can yourself ie prepare your own detailed accounts with a thorough breakdown of different costs and have some way of filing you receipts so that an accountant can easily find anything they want to check.
It isn't a difficult job, it's just tedious, (there is always something more exciting to do, like watching paint dry) and you have to be very meticulous in your recording.
It is very helpful to have an accountant experienced with FHL produce audited accounts for you, even if it is just for that delightful form from the VOA!
All I would say is do as much as you can yourself ie prepare your own detailed accounts with a thorough breakdown of different costs and have some way of filing you receipts so that an accountant can easily find anything they want to check.
It isn't a difficult job, it's just tedious, (there is always something more exciting to do, like watching paint dry) and you have to be very meticulous in your recording.
It is very helpful to have an accountant experienced with FHL produce audited accounts for you, even if it is just for that delightful form from the VOA!
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anya752000
- Posts: 465
- Joined: Wed Mar 06, 2013 7:30 pm
- Location: Pembrokeshire
As usual 7aspire's response is brilliant.
We started letting last year (2013-2014 financial year) and I decided not to employ an accountant. I use an excel spreadsheet and a cash based system. I don't find it taxing
I would suggest that with three FHLs you would find it easier to start off with an accountant, you can always decide to go it alone later down the line.
The first year is definitely more complicated as you have setting up costs to deal with and if you are renovating/refitting a property some of the costs can be used to offset tax and some can't.
There are lots of threads on here about tax/vat/accounts etc so it's worth a good search.
We started letting last year (2013-2014 financial year) and I decided not to employ an accountant. I use an excel spreadsheet and a cash based system. I don't find it taxing
I would suggest that with three FHLs you would find it easier to start off with an accountant, you can always decide to go it alone later down the line.
The first year is definitely more complicated as you have setting up costs to deal with and if you are renovating/refitting a property some of the costs can be used to offset tax and some can't.
There are lots of threads on here about tax/vat/accounts etc so it's worth a good search.