When you’re embarking on a big investment – namely, in property – it pays to ensure you have all the sums settled. It’s also important to view the investment holistically, taking into account all the possible fees and tax implications. Negotiating the various tax aspects of such an investment can be particularly onerous; an accountant can help. Why pay more tax than you should? Get someone on board early to help make sure you pay the least possible tax on your investment properties. On the search for a good accountant, here are a few key questions to ask yourself and your potential accountant:
When will I need an accountant?
Hiring an accountant can be really beneficial for anyone who finds themselves in a complicated financial situation. This means if you have assets tied up without regular cash flow – this can cause issues if you are looking for a mortgage to help you invest. This is also the case if you are self-employed. In general, accountants will be able to ensure that any buy-to-let investment is conducted with the lowest tax implications to you. This can make a big difference to the profit you make from your investments.
Where can I find an accountant?
As we discussed previously, finding your ideal property team can be a bit of a process. But once you start on a few leads, you can set these individuals quickly enough. In the case of accountants, start with recommendations from friends or family. Ask your estate agent. Or use online databases such as LandlordZone, or the Chartered Accountant search service ICAEW.
What are their qualifications?
The ACA chartered accountant qualification is the most respected in the accounting profession, and therefore will indicate the most highly qualified candidates. However, it is worth nothing that for property purposes, accountants can also have the ACCA and CIMA qualifications, which will be more than enough to assist you with any property-related queries.
What experience do they have?
Check on how many years your potential accountant has worked, specifically in property-related issues. This in many ways should be prioritised over the nature of their qualification – an ACA chartered accountant with no property experience will not be better suited than an ACCA/CIMA qualified accountant with 3-5 years! Weigh up your decision carefully here and ensure your accountant has handled similar situations in the past.
Have they kept up with changes in legislation?
Part of the benefit of knowing your accountant has a superior qualification is that these usually come along with professional development requirements. This means that your accountant would have to keep up with the changes as a matter of course – the Charted Tax Adviser qualification demands 90 hours a year of ongoing training. This means they will have had to keep up with any and all changes occurring in legislation over time. And things are always changing.
How do they charge for their services?
Take note of how your potential accountant charges for their services. Some will suggest that emailing and phone calls are not included – this is to be avoided! These services should really be included in any quote, so be sure to check before you commit. Accountants tend to charge in one of the following ways:
- An hourly rate;
- A fixed rate.
Negotiating a fixed rate can be a lot better in the long term for keeping a budget in check, so it is worth asking if they will be willing to set a rate for the entire job.
If you must go hourly, ensure that everything you require will be included in this cost. Generally speaking, a landlord’s tax return (for an accountant based outside London) will be in the £200 – 250 range (without VAT), or an hourly rate of approximately £80 – 150. Be sure to compare apples to apples – know what you are getting upfront and ensure all that needs doing is included in the price.
Do you get along?
At the end of the day, you want a positive working relationship with whoever you choose! This person should be able to get along with you and take into consideration your particular needs. Chemistry is therefore important, and knowing that the person communicates clearly and professionally. Do they answer emails promptly? Are they easy to get a hold of over the phone, or do they return calls promptly? Take note and follow your instincts!