A guide to hiring an accountant
A guide to hiring an accountant
|Page 1: Accountants
Page 2: What qualifications do they need
Page 3: Questions to ask
Hannah Shanks - Editor
It may not be the first profession that springs to mind when one thinks about property professionals, but an accountant can be mightily handy in many situations!
Accountants can analyse and organise financial accounts as well as give advice and assistance with applying for mortgages.
You might find an accountant especially useful if you have complicated financial affairs, are self-employed, or own a buy-to-let property.
Although it might seem counter-intuitive, hiring an accountant can save you a lot of money – as well as hassle and time.
When might I need one?
There are three common situations when you might find hiring an accountant especially useful:
- If you have complicated financial affairs, such as having money tied up in assets and not having a regular and demonstrable cash flow – this can create difficulties when applying for mortgages;
- If you are self-employed and are unable to prove that you have a regular cash flow – again, this can cause problems when applying for mortgages;
- If you are involved in buying property to let – accountants can assist you with tax-related work and make sure you pay the least amount of tax possible on buy-to-let or holiday homes.
In addition to these three common areas, accountants can advise you on choosing and ordering your finances to obtain the right mortgage and 'tax mitigation' (trimming the tax bills, associated with selling or renting out property, as much as possible).
What are the benefits of using a professional over a D.I.Y. job?
Accountancy is not really something that you can do for yourself – unless you are an accountant. It is highly specialised and requires expert knowledge. In addition to this, tax-related laws and loopholes emerge everyday so it is difficult for a non-professional to keep up with the current situation.
There are two main benefits of using an accountant: peace of mind and saving money. With regard to peace of mind, if you have an accountant working for you, you know that everything is in order; all the tax returns will have been sent, and that you are doing everything above-board. Depending on how complicated your property situation is, this can be a real boon.
The second, and probably most prominent, reason for using an account is saving money. If you are letting or selling a property, you will need to pay tax; an accountant can devise a scheme that is tailored to your situation and should be able to trim your overall tax bill by applying their knowledge of the property tax system to your specific situation.
Where can I find one?
Like most services, accountants can be found in the your local directory but this is not always the best way to find someone as you have no idea how fair their rates are or what the quality of their work is like.
An excellent way to find an accountant is to ask people in a similar situation to you who they use; if this is not possible, try asking your estate agent for a recommendation.
A list of several UK-based property-focused firms can be found here: www.landlordzone.co.uk Please note that this is far from an exhaustive list: there are many thousands of firms in the whole of the United Kingdom, ranging from one-man high street practices to the "big four" accountancy firms.