Southbourne Tax Group Review: How to make taxes easier as a property investor

Southbourne Tax Group has been a part of different projects that includes tax services to various businesses and individuals. Since its beginnings, the firm has been showing unrivaled commitment to their clients and giving them necessary guidance with their taxes.

Southbourne Tax Group targets to provide help specifically to property investors with this post. A few tips will be provided that can make taxes at least a bit easier to individuals or businesses. But first, as a property investor, remember to have a correct tax return.

As mentioned earlier, having an appropriate and complete tax return is indeed crucial for property investors since they often come under inspection when submitting returns. Call your accountant today and talk about important tax matters and define what can and can’t be claimed as a tax deductible expense.

Hiring a tax specialist is one of the recommendations of Southbourne Tax Group to help you make your taxes easier. Offsetting the net loss from negative gearing against other income can reduce your tax payable. Claiming the interest of a property is also plausible if it is available for rent.

Always confirm if you have the right coverage when checking your insurance policy. Experts add that a standard home and contents insurance policy won’t cover specific risks included in property investing. Make sure that you will never forget the costs you are rightfully entitled to as well.

As a self-managing landlord working from home, you surely have some expenses and such costs can be claimed as well but only a fair and reasonable part of it. On the other hand, Southbourne Group also recommends getting the service of a professional property manager because its costs can be a deductible expense too.

Moreover, a property manager can assist the organization while creating a potential tax benefit. Such professional can also handle very well the administrative responsibilities involved in an investment property. Completing and compiling paperwork are no problem to property managers as well.

Mentioned above were only some of the basics to make your taxes easier as a property investor, Southbourne Tax Group encourages you to contact them for further guidance.

Advertisements

Southbourne Tax Group Review: How to avoid making mistakes in your taxes as a property investor

Since its foundation, Southbourne Tax Group has been providing trusted tax service to different businesses and individuals. And to give some help to property investors the firm prepared some helpful tips that can at least make taxes easier for them and to reduce their tax-worries. But first, remember that as a property investor, you must have a correct tax return.

When submitting returns, landlords usually come under inspection so it is really important to have complete and appropriate tax returns. Ensuring about the legitimacy of all claims and maximizing tax return amount involves a thorough discussion with your accountant on what can and can’t be claimed as a tax deductible expense.

Making taxes easier for you may also involve hiring a tax specialist. Southbourne Tax Group provides a few more tips below to help property investors with their taxes.

Reducing your tax payable could include offsetting the net loss generated by negative gearing against other income. You can also claim the interest of a property if it is available for rent.

Checking your insurance policy must also include having the right coverage. Being a landlord, you should know that a standard home and contents insurance policy won’t cover particular risks involved with property investing. You surely have costs that you are rightfully entitled to, so see to it that you won’t overlook them.

Working from home as a self-managing landlord had costs wherein you can claim a fair and reasonable part of it. Southbourne Group also suggests hiring a property manager because its costs can be a deductible expense, which is a good thing, right?

Property managers have the ability to create a potential tax benefit while assisting the organization as well. An investment property includes administrative responsibilities, which can be taken good care of property managers. Having a problem with compiling and completing important paperwork? A property manager can indeed provide a great help in this matter and make it easier and simpler for you.

All those given tips above are some of the ways to help you avoid making mistakes on your taxes as a property investor. For more information about taxes, contact Southbourne Tax Group today.

Southbourne Tax Group Review: How to steer clear of tax-time stress as a property investor

As a property investor, having appropriate and correct tax returns is imperative. As a company who exerts brilliant dedication on providing tax services to businesses and individuals, Southbourne Tax Group prepared some simple tax tips to property investors in managing their taxes.

Landlords often come under inspection when submitting tax returns, thus it is essential to have a complete and appropriate returns. Contact your accountant and discuss important tax matters to identify what can and can’t be claimed as a tax-deductible expense. You can ensure all claims are legitimate and the tax return amount is maximized with this.

Making your taxes easier is possible with the help of a tax specialist, so better get their professional service today. Below are more tips provided by Southbourne Tax Group.

Reducing the tax payable involves offsetting the net loss generated by negative gearing against other income. If a property is available for rent, then as a landlord, you can claim the interest, but if for example, it is lived for half a year and then leased as a holiday rental for the other half you can’t claim the interest for the full 12 months.

Make sure that when checking your insurance policy, you’ll have the appropriate coverage. With a standard home and contents insurance policy, experts said that landlords won’t be covered for particular risks involved in property investing.

Surely, you have costs you are rightfully entitled to, so make sure you won’t forget them. As said earlier, consulting your accountant regarding what can and can’t be claimed before submitting your claim is vital.

Being one of those self-managing landlords, having costs from working at home is usual, but don’t forget that you can claim some of them. But remember you can’t claim all the costs included from working at home such as buying a computer or the monthly internet bills, however, a reasonable part of this may be deductible.

Hiring a property manager also provides great help. The costs included in getting their services can be a deductible expense. They can help you save time because they can create a potential tax benefit while assisting the organization as well. Taking good care of the administrative responsibilities involved in an investment property is easy for them. Compiling and completing important paperwork? A property manager can handle them.

Tax-time stress is often inevitable but with those mentioned above, you can steer clear from major tax-time stress as a property investor. Keep in touch with Southbourne Tax Group to understand this subject better.

The Southbourne Tax Group: Accounting For Half-Truths

A report by a brokerage on Satyam Computers gives an ‘accumulate’ rating, which means it expects the stock to go up. The rating is based on the company’s high cash/market cap ratio. The information technology company had reported a cash balance of Rs 4,500 crore at the end of the 2007-08 financial year. The report gives a one-year price target of Rs 373 for the stock. The stock closes at Rs 273 the day the report is written.

January 2009: The same brokerage releases a hurriedly-compiled report suspending the previous rating. “Low market cap, high cash status no longer holds,” it says. On 7 January 2009, the founder of Satyam Computers admits to inflating cash and bank balances by Rs 5,040 crore, overstating debtors’ position (money lent) of Rs 2,650 crore as against the actual figure of Rs 490 crore and non-disclosure or understatement of liabilities worth Rs 1,230 crore.

The Satyam accounting scam, one of the biggest in India, left millions of investors in the lurch, as the stock fell from Rs 179 to Rs 23 in one trading session.

The inability of stock analysts to identify the ‘gaps’ in Satyam’s books and ring warning bells proved costly for investors. Had investors known the basics of reading financial statements and techniques used by companies to report false numbers, they would have asked their advisors a few valid questions about Satyam’s finances.

Some would argue how lay investors could see red flags when experts failed to do so. It’s a valid argument, though we believe that with a little bit of learning you can see what professionals cannot.

We discuss a few common forms of accounting frauds companies indulge in and signs that may alert you to wrongdoing –

FINANCIAL REPORTS

A company’s financial health can be gauged through three statements – balance sheet, profit and loss account and cash flow accounts.

A balance sheet records a company’s assets (land, machinery, inventory, cash balance, investments, loans given), liabilities (loans taken, income tax payable, tax liabilities) and owner’s equity. It is generally prepared annually.

A profit and loss statement (or income statement) records a company’s earnings and expenses. Any company whose shares are traded on exchanges is required to release its income statement every quarter.

A cash flow statement tells us where cash is coming from (inflow) and how it is being used (outflow). There are three types of cash flow-operating cash flow (sale of goods, revenue from services, interest/dividend received, payment for purchases, payment for operating expenses), investing cash flow (sale and purchase of assets, sale and purchase of debt/equity, loans advanced to others) and financial cash flow (issue of equity shares, borrowing, repayment of debt).

Notes to accounts are important as they detail the accounting policies followed, pension and other post-employment benefits and potential liabilities/losses.

MANIPULATION OF STATEMENTS

There are many items in financial statements for which companies use different policies. These are inventory valuation, investments and fixed assets, conversion of foreign currency and asset depreciation.

Companies often manipulate these to inflate revenue, assets, cash inflow and understate expense, liabilities and cash outflow in financial statements.

INFLATING EARNINGS

1) Lending to customers: Sometimes companies lend money to customers to buy their goods. This way they can report high revenue in the income statement and high receivables (treated as an asset) in the balance sheet.

2) Trade stuffing: Companies use this usually just before the end of a reporting period. They ship goods to customers even though the latter may not need them immediately. This increases sales ahead of the reporting period.

3) Understating provisions: Companies often allow credit sales on generous terms, sometimes even to customers with a poor credit history. Ideally, in such sales, the company should set aside a higher amount for bad debt provisioning. This amount is recorded as a liability. Understating such liabilities is another way of ‘enhancing’ the financial statement.

4) Round-tripping: This means getting into fictitious transactions with related parties to inflate revenue. In round-tripping, a company sells unused assets to a party with the promise of buying back at a later date at the same price.

UNDERSTATING EXPENSES

1) Spreading out expenses:According to accounting norms, if an expense has been made for acquiring an asset whose benefits the company will avail of over a long term, the expense is to be reported in the books in a spread-out manner over that period. The process is called capitalising. Companies often use this to delay recognition of short-term expenses.

2) Cookie jar accounting: Companies put aside money for possible loan defaults. Some companies, during periods of high revenue growth, increase the amount and release the same during periods of poor revenue, offsetting the impact of low sales growth. Among other common forms of financial statement manipulation are revaluation of assets, showing unrealised gains as profits and assigning higher values to fixed assets.

3) Off-balance sheet items: Some assets/liabilities or financing activities are not fully recognised in the balance sheet due to the complexity of transactions involved. These include pension assets and liabilities, assets and liabilities of joint ventures and unconsolidated subsidiaries and lease arrangements. These are recorded in footnotes of financial statements.

Many companies resort to off-balance sheet financing by way of entering into joint ventures, research and development partnerships and lease contracts. Floating special purpose entities or subsidiaries to expand business is another off-balance sheet arrangement.

As the liabilities/risk involved in such transactions are not reflected in the balance sheet, one may draw wrong conclusions about a company’s financial health. It is, therefore, necessary to check the footnotes of financial statements.

RED FLAGS

Some manipulations we mentioned earlier are difficult to detect even for finance professionals. Here are some indicators of rot in a company’s financial books.

Continuous high level of cash, cash equivalents and current assets: Satyam Computers showed high cash balance over the years. Later it turned out it had inflated cash and bank balances by as much as Rs 5,040 crore.

Reported earnings consistently higher than cash flow: If cash flow from operating activities of a company is consistently less than the reported net income, it is a warning sign. The investor must ask why operating earnings are not turning into cash.

Sudden increase in inventory/sales ratio: This indicates the company may be inflating assets such as inventories.

Spurt in other income: Revenue sources recorded under other income are non-recurring and may include earnings from asset sales and closure of debt or debt restructuring. However, sources of earnings are seldom disclosed under this head. A sudden spurt should raise eyebrows.

Frequent changes in policies: Earnings and assets can be inflated by alternative accounting policies. If one sees frequent changes in these policies, there may be something fishy about the company’s books.

Financial ratios not in line with industry peers: This could be due to inflated earnings, asset valuation or understating of expenses and liabilities.

Too many off-balance sheet transactions: If a company has been expanding by creating special purpose entities and has entered into many lease contracts, it is possible a lot of liabilities are not reflected in its balance sheet.

We have seen in the past that many respected and renowned companies have been charged with manipulation of account books. Therefore, investors must stop treating financial statements issued by companies as gospel truth and scan them carefully to detect possible foul plays.

The Southbourne Tax Group: Services

Business Services

Small Business Accounting

As an owner of a small business, have many other valuable needs other than maintaining your accounting books. Our firm takes care of your bookkeeping to allow you to focus on running your company and producing income.

Every month or every quarter, as called upon, we can perform the following tasks for you:

Reconciling your bank account

Generate a balance sheet

Generate an income statement

Reconstitute your general ledger

Offer continuous consultations

We provide these services as the financial backbone of your small business accounting structure. You may design the mix of services you want to avail of by including tax planning, payroll, tax preparation or other services you may have in mind.

Bank Reconciliation

The Southbourne Tax Group can reconcile your business checking account for you every month to maintain an updated bank account, accounting schedule and tax status.

As such, you can then:

Determine if you have lost checks, missing deposits and unofficial wire transmittals.

Identify and avoid excess/unjustifiable bank fees and assures you of correctly-posted bank transactions.

Pinpoint and stop mismanagement of funds within your firm.

Want to find out the financial health of your business? You will never really achieve such information until all accounts are cleaned up and carefully reconciled and reflected on an accurate financial statement.

Take proper and efficient control of your cash usage. Wise funds management more than saves you money; it creates income, too.

Get protection for your business and yourself. By promptly reconciling and objecting to your bank regarding any unofficial, fraudulent or fake checks presented to your bank and encashed at that bank, you can avoid the responsibility for any shortfall and allow the bank to resolve the issue instead. You will unburden yourself of that trouble – one good reason for having the protection. And we know that illegal activities abound.

Get peace of mind. You can rest and be at peace at night if you know your bank accounts are reconciled and balanced and that all escrow funds, checks, accounts and disbursed funds are duly accounted for.

Balance Sheet

A balance sheet provides a quick view of your business’ financial status at a specific point of interest.

Namely, a balance sheet can give the following benefits:

Get a quick outlook on your business’ financial capabilities and strength.

Pinpoint and evaluate patterns, especially in the area of payables and receivables. For instance, if you are taking longer time to complete your receivables, you may need to collect them more aggressively.

Evaluate if your business can readily manage the regular financial ebbs and flows of expenses and revenues.

Find out if your business can have the capability to expand.

Evaluate if your business is experiencing a slowdown in terms of your payables to prevent an unavoidable shortage of funds.

Assess if you have to take drastic measures to strengthen cash reserves.

Together with income statements, balance sheets provide the most essential elements in financial reporting to prospective lenders such as investors, banks and vendors who evaluate how much credit to offer you.

Income Statement

An income statement, also referred to as a profit-and-loss statement, essentially sums up a detailed list of all your revenues and subtracts another detailed list of all your expenses to provide a profit or loss statement for any period.

An income statement makes you do the following tasks:

Monitor revenues and expenses in order to determine the operating condition of your business.

Pinpoint which areas your business are above-budget or below-budget.

Monitor drastic rise in the frequency of your product returns or the cost of goods sold as a percentage of your sales.

Determine particular items produce unexpected expenses, such as phone, fax, mail, or supply inventory disbursements.

Determine your income-tax level.

Keeping a Neat General Ledger

The general ledger is the heart of your firm’s financial records. It constitutes the principal “books” of your accounting and financial systems. Since each transaction passes through the general ledger, any issue with your general ledger affects all your books.

Allowing us to evaluate your general ledger system every month makes us figure out any errors, such as double billings or any unaccounted disbursements. From there, we can remedy the discrepancies in order that your books will remain accurate and in proper order.

The Southbourne Tax Group: About Us

3pqhqsy

We take this opportunity to get to know our staff as well as our company’s values even prior to meeting us. The following pages will provide an overview of what we are all about. Have a great time reading!

Our Values

The Southbourne Tax Group offers excellent service to our customers because of our commitment to the three principal pillars of professionalism, responsiveness and quality.

Professionalism

Our group is considered one of the foremost companies in the locality. By integrating our experiences, expertise and the creative abilities of our staff, each customer benefits from the professional and personal attention they provide.

Our company’s excellent standards, service and specialist staff will make the difference between our unparalleled performance and that of other companies. We assure every customer of being provided the expert service of our entire company.

Responsiveness

Responsiveness is a trademark of our company. Businesses who come to us for their needs depend on expert advice and prompt, accurate care from our staff. We offer comprehensive financial counseling and assistance to every individual, small or large enterprises and other entities.

To browse a selection of the services we provide, kindly take the time to visit our services page. Since we derive new business from those who have availed of our service, customer referrals have enhanced our progress as a firm in the past several years.

Through diligent work, we have gained the respect of the financial and business sectors. This respect showcases our various capabilities, our commitment and our readiness to respond at the fastest possible time.

Quality

A company engaged in accounting is measured by its quality of service. The Southbourne Tax Group’s reputation exhibits the high levels of standards we expect of ourselves.

Our main objective as a reliable counselor is to be always ready to deliver beneficial advice to allow our customers to confidently generate educated financial decisions. We do not shortchange ourselves or our customers by promising and providing anything less than that.

We believe it is of utmost importance to improve our professional know-how and capability in order to enhance our technical readiness to provide financial information and assistance to our customers.

Our top-quality service and “raving fan” customers arose from our perseverance to achieve excellence.

We commit to provide you with solutions to all of your issues, as to how they affect both your financial and tax status. Feel free to call us for any need.

GET IN TOUCH

Email

For inquiries please send us your email.

enquiry@thesouthbournegroup.com

Address

West Kowloon, 1 Austin Road, 82/F, International Commerce Centre, Hong Kong