8:11 AM, 10th October 2016, About 6 years ago 10
Please can anyone help me find my light at the end of my tunnel? I’m looking to find an accountant who ‘understands property’ and will not tell me that Clause 24 is not that bad and well your rent is your pay.
I’ve worked my socks off these last 4 years on my own for two successful HMOs and now recently renting out my own home as I have recently moved in with my partner. With Clause 24 this will push me enough over into the 40% tax bracket making the extra tax due reduce my profit/wages/living income reduce by a good £500 pcm.
I have a Ltd company which I was considering closing as my service was teaching, can I rename the Ltd and add ‘property manager’ as my HMOs do take up a lot of my time as I manage everything myself and would like to pay myself! I would love to hear from anyone who will also due to the mortgage interest be tipped over by a good £10-£15K and would end up paying at least another £6-8K in Tax.
The crossroads for me is ‘am I earning enough from my properties to incorporate’ – probably not, do I sell one and re-buy in a Ltd – maybe. Do I take the amount in the 40% tax bracket and put it in a pension. Anything but pass an extra 8K to HMRC – is that my reward for working hard as a single mum with two kids who will want to go to University in a few years! My accountant wants £885 plus Vat to do a self return for 3 properties and a small caravan FHL?
Finally in search of a new accountant is it true ‘Clause 24 will be restricted to the basic rate of income tax and therefore does not effect basic rate tax payers?’ when my accountant said this I was confused? I replied ”Everyone is effected even a basic rate tax payer will have more income due to mortgage interest and therefore pay more tax even at 20% but like me it now will push me over quite a lot into the 40%.
Any advice would be really helpful.
Thank-you in advance for your time.