My wife and I are retired owners of 4 properties in the UK, all of which are in joint names and all managed for us as holiday lets.
The total gross booking income for these is just under £100K / annum and as such we have recently asked our accountant to register us for the Flat Rate VAT scheme which for this industry works out at 10.5% of the total booking gross income.
We chose the Flat Rate Scheme because we are rarely charged VAT and therefore there would be little VAT to reclaim.
We have been running this for a few months but keep forgetting that the 10.5% will be based on the £100K / annum as opposed to 10.5% on the net profit which after costs including mortgage, management fees, commission, cleaning costs, etc is usually only around £30K / annum.
Once the 10.5% is taken off the £100K it will leave just under £20K profit which means it’s hardly worthwhile taking into account the stresses, etc.
My question is, can someone please advise on any other aspects we should be looking at or ways around this please?
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