Our Property developer tax advisors save you tax Property developers often pay more property tax to HMRC than they need. This is because several UK property tax regimes are complex and lead to confusion. UK property developers need the support of savvy property developer tax experts to help them build wealth whilst paying less tax. Property developers often pay more Stamp Duty than they need because conveyance solicitors use generic HMRC Stamp Duty calculators, which do not inform the property developer of the Stamp Duty reliefs available to them. Our property developer tax experts successfully claim stamp duty refunds for overpaid tax from HMRC. Value Added Tax (VAT) is a complex area of taxation that many general accountants do not understand, resulting in VAT overpayments by many property developers in the UK. We have helped property developers that embark on commercial to residential conversions save at least 15% VAT and, in most cases, 20% VAT. Reclaims of VAT may be made on specific property development projects. Optimise is proud that our property developer tax advisors have helped over 1,000 clients to reduce tax on property development projects across SDLT, VAT and property tax. There is, of course, property tax that we need to consider for property developers, and our property developer tax experts are on hand to ensure that the minimum amount of tax is to be paid to HMRC. Property tax that developers need to think about Stamp Duty Land Tax (SDLT) There are many ways in which property developers can avoid paying SDLT. Developers need to be aware that many investors overpay Stamp Duty, which we reclaim. Value Added Tax (VAT) There are many ways in which property developers may reduce the rate of VAT from 20% to 5% or even 0%. Our property developer accountants work with their clients to understand the correct VAT rate for each development project. You can also reclaim overpaid VAT, which our property developer tax advisors can guide you through the tax refund process. Property tax There are many tax structures that property developers can own property. Some are more tax-efficient than others. Our property developer tax experts can help you understand how to reduce tax using the correct tax structure and to use many legal and ethical techniques to reduce tax. Limited vs holding companies Limited companies are a great way to manage taxes regarding property development. However, using them incorrectly can overwhelm you with administrative responsibilities. You need to avoid the crushing weight of dozens of spreadsheets, a wallet or purse full of company cards, numerous annual returns, and complicated tax planning. We can help find a better solution. It’s possible to manage many properties using just two holding companies. For this strategy, one limited company is created to hold property as a long-term investment, and a second is created looking to buy and sell—in other words, flip—properties. By agreeing with joint venture partners that they can have a charge over the purchased property, they’re guaranteed a percentage of the profit or the increase in market value. They don’t need to be shareholders of either of the two companies. This solution is simple in theory, but it’s another thing entirely to implement it correctly. Additional factors to consider, such as registration with the Construction Industry Scheme (CIS). Our property development accountants can advise you on the best way forwards. Tax structures for Property Developers Own property in your own name We see many property developers that own property in their name. Our property developer accountants always advise against this. Your assets could be at risk if someone were to sue you. The top rate of tax that may be applied to your property development is 45%. We are ignoring the additional stealth tax of Class 2 and Class 4 National Insurance tax charges. Limited company A limited company provides many tax advantages for property developers. They also provide a legal shield if something goes wrong with a project. The legal liabilities remain with the company and not the company's owner. Holding company A holding company may be used to transfer assets from one company to another without causing tax liabilities. They also allow property developers to move profit and money between each of the subsidiaries within a group tax structure. Tradespeople and VAT schemes Many investors in property development are paying more tax than they need to. Specifically, the tradespeople carrying out the development fail to use existing VAT schemes and pass the cost back to the developer. The tradespeople can pay just 5% VAT instead of the regular 20% in many cases. These schemes allow tradespeople to reduce VAT on sales invoices to convert a commercial building into residential use. Tradespeople may buy in materials and claim back the usual 20% VAT. However, due to legislation incentives, the VAT charged by the tradesperson to a property investor is just 5%. This is a tidy saving of 15% on the materials and labour. Property developer accounting Regardless of the specifics of your situation, we are confident that we can help you save money. Our team has the knowledge and expertise to help you with all of your property development accounting needs. We are committed to doing the best accounting work possible. Our property accountants have received qualifications from the Association of Accounting Technicians (AAT) and the Association of Chartered Certified Accountants (ACCA). Our prices are competitive, and our services are excellent value for money. Our accountants get to know the specifics of your situation so they don’t miss out on any opportunities to reduce your tax liability. Not every client needs ongoing tax planning. We recognise that every situation is unique, and we offer a variety of services to meet your particular needs. For instance, clients who have already set up their tax strategy and just want to ensure that they haven’t missed any opportunities can benefit from a quick one-off call. A call with our qualified property developer accountants is also a good investment for clients who haven’t established a strategy. We can review your situation, identify your options, and agree on a tax-saving plan with you. After the call, we’ll provide you with the call recording and the notes from the session, so you can go about implementing your strategy right away. As well as being the accountants’ property developers turn to, we also offer: – CGT accountancy services – Inheritance tax mitigation services – Stamp Duty Land Tax (SDLT) mitigation and refund services Stay up to date with the latest SDLT tax legislation with insight from our senior property accountants.