Even accountants make mistakes – mine did!

by Alison King

6 months ago

Even accountants make mistakes – mine did!

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Even accountants make mistakes – mine did!

Today I had to undiscombobulate my accountants who were in utter confusion over Section 24. Not only had they applied it to my 2016-17 tax return but they had calculated it wrongly too. Fortunately I spotted this and was able to point out the error of their ways, to much embarrassment on their part.

It doesn’t surprise me. The rules are so complicated as to defy belief.

If this has happened to me it will doubtless happen to others and not everyone is so vigilant when it comes to checking detail. Nor is everyone is as understanding and there is a lot of scope for mistakes leading to loss of reputation, loss of business, legal action and more. I can envisage small accountancy firms coming very unstuck over issues like this, not to mention the extra workload for HMRC in having to try and check it all. Tax should not be so complicated that it requires this much effort to work it out.

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Comments

Mark Alexander

6 months ago

I suspect many landlords will make the decision to move to a specialist property accountant over the next few years. Landlord Tax is becoming very specialised these days.

It marks me that some Accountants produce what appear to be authoritive reports on various strategies and condemn structures which they don’t fully understand. For example, I was sent a report yesterday, written by an accountant, which said that for landlords not to pay SDLT at the point of incorporation they must have a partnership UTR or be an LLP. That is simply not true, HMRC has a manual which explains that a business partnership under the definition of the Partnership Act 1890 is equally entitled to claim the partnership SDLT relief at incorporation. There is no legislation which compels landlords to have registered a partnership with HMRC to qualify for the relief.

My longstanding traditional accountants don't seem to get it, have an unsympathetic black and white approach and want to charge me masses for ineffectual time spent by expensive advisers who frankly have suggested nothing unless we wish to engage them on the same charges which are prohibitive and add insult to the initial injury. We doubt there will be any cost benefits to us and therefore are looking to change accountants.

Mark Alexander

6 months ago

Reply to the comment left by Chris Novice Shark Bait at 01/11/2017 - 10:04
I’d be happy to refer you to my Accountants and to consult generally in regards to whether your current ownership structure is the optimal one.

Please see our main tax page.

Thanks Mark,

I have already approached Pacific. My 2017 returns need to be reconsiled by me and I am struggling for reasons stated by others earlier in this thread and other threads. The inhibiting factor for me is previous scams leaving me with lemons, hence my pseudonym. Litigation still pending 10 years on - a living nightmare. Do you really think you can help? it involves MX.

Mark Alexander

6 months ago

Reply to the comment left by Chris Novice Shark Bait at 01/11/2017 - 10:34
If I can't help I will refund

Vijay Khullar

6 months ago

It is important for accountants to point out that section 24 does not affect any property business that does not have any loans or where the taxpayer's current income including net rental income but excluding any loan interest is below the 40% tax band.

Thanks Mark, I have you in my cross hairs (in a friendly way)
Watch this or similar spaces.
Might revisit Malta- just because.
Chris.

Mark Alexander

6 months ago

Reply to the comment left by Chris Novice Shark Bait at 01/11/2017 - 10:49
Unusually, it is raining in Malta today!

Alison King

6 months ago

Reply to the comment left by Vijay Khullar at 01/11/2017 - 10:49
You are right that it doesn't affect the bottom line for a 20% taxpayer, but as far as I can see the calculations still have to be worked out according to the complex new formula in case it causes the taxpayer to dip into the 40% bracket. That's how it's shown on all the examples on the HMRC page.

Mark Alexander

6 months ago

Reply to the comment left by Alison King at 01/11/2017 - 12:59
Correct, I think you are both saying the same thing

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