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Where Taxpayers and Advisers Meet

Cash basis accounting landlords.

jim1980
Posts:11
Joined:Fri Nov 16, 2018 8:30 am
Cash basis accounting landlords.

Postby jim1980 » Fri Nov 16, 2018 9:24 am

Hi
I'm a very new to it all landlord with two properties in the uk.

Got a question about how to account for expenses like Insurance, Gas Certificates,
Boiler servicing, Ground rents, etc., these are all annual costs, but they all fall with in two different tax years for their validity.
How do you account for this, under the cash basis accounting system, do you account for it, in the year you pay it as a single cost ?
Or do you split the cost into 365 days and then portion that into the different tax years ?

Bit lost on this,
Did have a look on the uk government webb site but didn’t find it.

Anyone
Thanks Jim.

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Cash basis accounting landlords.

Postby AdamS93 » Fri Nov 16, 2018 11:55 am

The ordinary way to calculate the cost will be based on an accruals basis - i.e. treat some of the expense as a prepayment for the following year.

The cash basis means you include expenses when you physically pay them.

jim1980
Posts:11
Joined:Fri Nov 16, 2018 8:30 am

Re: Cash basis accounting landlords.

Postby jim1980 » Fri Nov 16, 2018 1:56 pm

Hi AdamS9
Thank you for the reply
That makes it a bit easer, if i can treat the annual costs
as a one off payment, in the year I pay them, and not need to split between years.
Thanks for that
Jim


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