Bookkeepers must navigate the complex world of regulation to maintain compliance with the financial regulations and professional guidelines. Engagement letters become a core aspect of it being legally binding agreements that clarify the scope of work, responsibility, and obligation.
FigsFlow’s engagement letter software for bookkeepers up-to-date with the constantly updating laws by automating document management, and keeping accurate records, among other advantages. With the help of this tool, bookkeepers can minimise legal risk while improving business efficiency.
Standardising Engagement Letters for Compliance
Regulatory bodies require bookkeepers to maintain clear, normalised engagement letters for each client. Handwriting the letters, however, can create inconsistencies, missing clauses, or expired terms.
FigsFlow streamlines compliance using pre-approved, industry-aligned templates that are bookkeepers’ own to fill in the specifics of the client particular needs. The templates ensure that any contract has the disclosures, terms, and conditions required for compliance to avoid non-compliance.
Electronic Audit Trails and Secure Documentation
Proper record-keeping is essential to compliance with regulations. FigsFlow’s software records all engagement letters automatically, in digital form, in a secure cloud-based environment.
Every interaction, update, and signature is tracked, creating an audit trail bookkeepers can refer to in the case of a dispute or compliance review. This openness not only strengthens legal safeguards but also makes it easier for compliance procedures internally.
Automating Compliance Checks and Notifications
As the financial regulations continuously change, engagement letters need to be updated with utmost importance by bookkeepers. FigsFlow offers automated check compliance that triggers users if the agreement needs adjustment because of changed regulations.
As well, bookkeepers and clients are reminded through automated notifications if engagement letters require renewal, with no agreements left to expire without review. The proactive measures avoid administrative burden as well as support regulatory compliance better.
Improving Data Security and Confidentiality
Data protection legislation requires bookkeepers to store and manage client contracts in a secure manner. FigsFlow addresses the issue using encryption, access controls, and secure cloud storage to safeguard financial records containing personal information.
Replacing physical documents with insecure email transfers, bookkeepers can reduce threats of data breach and meet confidentiality of documents as well as requirements of client privacy.
If you’re a landlord in the UK, you’ve probably heard about Special Purpose Vehicles (SPVs) and the benefits of owning rental properties through a limited company rather than in your personal name. With changes to tax laws and lenders favouring company structures, many landlords are making the switch. But is it the right move for you? And how do you actually go about transitioning your portfolio?
This guide will walk you through the process in plain English, covering the benefits, potential pitfalls, and key steps to getting your SPV set up the right way.
Why Move Your Portfolio to a Property SPV?
Years ago, most landlords bought properties in their personal names. It was simple, mortgages were easy to get, and tax bills were manageable. But then Section 24 of the Finance Act changed everything.
Now, landlords can no longer fully deduct mortgage interest from their rental income before paying tax. Instead, they only get a basic rate tax credit, which means higher tax bills—especially for those in the 40% or 45% tax brackets.
This is where an Property SPV Limited Company Formation for Buy to Let comes in. By owning your buy-to-let properties through a company, you can:
· Deduct 100% of your mortgage interest as an expense
· Pay corporation tax (currently 25%) instead of higher personal tax rates
· Reinvest profits into new properties without personal tax liabilities
· Protect your personal assets with limited liability
But before you rush to set one up, there are some important things to consider.
Things to Think About Before Making the Switch
Moving your properties from personal ownership to an SPV isn’t as simple as changing a name on a title deed. You’re essentially selling the property to your own company, which can trigger:
· Stamp Duty Land Tax (SDLT) – Your SPV will need to pay SDLT on the property’s market value. If you own multiple properties, Multiple Dwellings Relief (MDR) might help reduce this cost.
· Capital Gains Tax (CGT) – If your property has increased in value, you may owe CGT on the profit from the sale. The tax-free allowance is now much lower than it used to be, so this could be significant.
· Mortgage Considerations – Your personal buy-to-let mortgage won’t transfer to your SPV. Instead, you’ll need to remortgage in the company’s name, which could mean higher rates and additional fees.
For landlords with highly leveraged properties, mortgage affordability under an SPV structure can be trickier, so speaking to a specialist mortgage broker is essential.
How to Transition Your Portfolio to a Property SPV
If you’ve weighed up the pros and cons and decided that moving to an SPV Limited Company Formation for Buy to Let is right for you, here’s how to go about it:
1. Set Up Your SPV
You’ll need to register a limited company with Companies House. When doing this, make sure to use the right SIC codes (such as 68100 or 68209) to classify it as a property investment business.
It’s also a good idea to keep your SPV structure simple—having multiple shareholders or complicated share classes can make things tricky later on.
2. Open a Business Bank Account
Your Property SPV needs a separate bank account for collecting rent, paying expenses, and handling mortgage payments. Keeping company finances separate from personal ones is key to avoiding tax headaches down the line.
3. Transfer Your Properties
This is the tricky part. Since you’re technically selling your properties to the SPV, you’ll need:
· A valuation to determine market value
· A solicitor to handle the legal side of the transaction
· A new mortgage in the company’s name
This is where costs start adding up, so make sure you’ve done the maths before proceeding.
4. File Your Accounts and Stay Compliant
Unlike personal ownership, where tax returns are relatively straightforward, owning properties through an SPV comes with more admin. You’ll need to:
· File annual accounts with Companies House
· Submit corporation tax returns to HMRC
· Keep accurate records of income and expenses
A good property accountant can take care of all this for you, so it’s worth finding one early on.
