Letting agent/Middleman

Letting agent/Middleman

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I have a particular scenario with a certain client as described below:

My client acts as an agent/middleman for letting other peoples properties out.

He gets a contract per property from the Council who pay him the rent directly for the tenant. The properties are all owned by third parties whom he has a separate contract with. For this example say he receives £7,000 p.a. from the council for Property A.

He then pays the landlord directly say £6,000 and makes £1,000 'commission' p.a. The landlord does not know how much my client receives from the council.However my client pays for all the expenses/maintenance for Property A himself, ie, water rates, repairs, furnishings, etc.

My questions are:

1) Is my client 'Self Employed' as he is 'Employed' on a full time basis or can he declare this as 'Other Income' on his SA Return?

2) Are the expenses which my client incurs whilst within the contract with the landlord an allowable business expense for his business since the landlord only receives the amount agreed, ie, £6,000 or is his commission £1,000 which he needs to declare on his SA Return?

Thanks and hope somebody can shed further light on this.

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By Tim Vane
04th Jan 2015 10:25

Your client should go find himself an accountant who will be able to help him.

Are you his bookkeeper - presumably you know an accountant that you can refer your client to?

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By King_Maker
04th Jan 2015 14:27

I assume the client is aware that an agent holds any "secret" commissions (or bribes) as a constructive trustee for his/her principal?

If not, then a lawyer as well as an accountant may be required.

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