Following taxguru's reference you will see that property income losses are carried forward snd treated as a loss made in the next period. Therefore the £10,000 is added to the current period £30,000 and treated as having been made in the current year, i.e. now a £40,000 property loss in the current year.
Your software is therefore currect to offset those losses against other profits made in the current year, the chargeable gains.
Based on what you have said:
Treatment correct for rent
Add VAT to the monthly estimated service charge and notify client of invoices raised and VAT.
Advise client of input tax on expenses to be set against their output tax
Add VAT to your fee if you are VAT registered and treat as input tax for client and build into service charges like other costs
When annual reconciliation of service charge is done, ignoring VAT, raise invoices/credit notes plus VAT to be sent to tenants
Consult your client who will know the facts of the case, just in case there is anything in the leases which contrdict the above.
OK for me
I have just filed one and it went through OK
I sufferred from the same thing, but then checked notices for the year 2016/2017 rather than Current Year and abracadabra, there they were!!
@Anne Robinson re partnerships
Taxfiler does these as well
Used it for over 10 years
I have used it for over 10 years and recommend it highly. In that time I have referred a couple of items to their support and the answers were in the software.
I cannot understand JCresswells comments about being difficult to use, it is the easiest that I have ever come across, and I have used quite a few. Download the free trial and see how you get on.
PTP Corporation Tax
I have used PTP for over 10 years and think that it is a good product. However, a 6.9% increase in the price this year, without any notification that it was such a steep increase, prompted me to look around and change.
I have moved to Taxfiler for corporation tax which seems to work OK, but it is early days yet.
The next software from PTP for personal tax and Trust tax comes up for renewal at the end of March 2016 and I will be giving notice on that one shortly. I will be disappointed to leave PTP because I have been very satisfied with the product and know how it works. However, I am sure that it won't take long to master the next one.
More complicated than you think
You have Agency debtors for the rents, Agency creditors for the expenses, and a client bank account for the landlord's money. All of these must be kept separate from the letting agency's accounts.
. If the landlord is registered for VAT, any VAT on the income/expenses is the landlord's, not yours and should be accounted for by them. Some of the income may be VAT exempt and some standard rated, likewise vat recovery on the expenses.
Service charge invoices to the tenants are usually estimated amounts which are then followed by an annual reconciliation, resulting in further invoices to the tenants or refunds due to them.
As far as the agency repair costs etc are concerned, an invoice from the letting agency is treated exactly the same as any other supplier. The letting agency should not make a hidden profit from any recharge, the landlord must be made aware of any admin fees charged to him.
If there are any units unoccupied, then the landlord is responsible for that proportion of the service charges and these should be invoiced to the landlord as if they were the tenant, but with no VAT added because he cannot charge VAT to himself.
Because of these complications, this is not the forum to get definitive answers. You should involve the letting agency's accountant as soon as possible to avoid what could otherwise be an enormous mess for them to sort out after the event at a likely hefty cost.
If you are comparing take home pay then your first example should start with the same net dividend of 31,410 as in your second example, not a net (and gross) dividend of 34,900, as otherwise you are not comparing like with like. You will then see that the take home pay goes down.
I agree with John. The solicitor, or your client, may be confusing CGT with Stamp Duty.
Not always Revenue's fault
Client was getting threatening letters from HMRC because of unpaid PAYE. Client knew that he had paid, sent copies of bank statements to HMRC who insisted that cheque was not received. Client got copies of cheque from bank, only to find that it had been intercepted and fraudulently paid into another account.
Client sent a replacement cheque to HMRC and recovered recompense from bank for fraudulent banking. The moral of this story is to always pay online, which client now does.
Presumably the mild mannered accountant will put his self employed murderer business on his tax return. How should he describe it?
I suggest Pest Control
On the beach....
I'll drink to that..... Burp....
Only one key....
Many years ago, a solicitor client was defending someone accused of theft. There was only one key to the petty cash box and the defendant had it.
The cash box was passed along the jury and one of the members paused with it, took out a bunch of keys from his pocket and opened it. Collapse of case!!
I was once told by a client that I was unlike any other accountant that he had ever met. I took it as a compliment, but maybe he didn't get out much!
Don't let it get to you.
When this sort of thing happened to me once, I just thought of CJ in Reggie Perrin, and it took all of the tension out and made me chuckle to myself.
When a subordinate knocked on his door, CJ would mutter "One two three four, make them stand outside the door. Five six seven eight, does them good to make them wait. Nine ten eleven twelve, Come!"