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NLA Publishes Landlords At A Glance Guide To Voting

NLA Publishes Landlords At A Glance Guide To Voting

NLA Makes It Easier For Landlords To Vote
With At A Glance Guide To Main Political Party Manifestos

The National Landlords Association (NLA) have decided to make it a bit easier for floating landlord voters who may not have decided who they intend to vote for yet, by compiling a short at a glance guide to where each political party stands on key policies related to property ownership in the UK private rental sector and landlord life.
As we published on Spotlight yesterday, every political party have their own views on each of the following measures:

  • Rent Control
  • Longer Tenancies
  • Landlord Licensing
  • Landlords’ Register
  • Letting Agent Fees
  • Landlord Tax

Tomorrow is polling day in the UK (7th May), so if you haven’t already decided which of the political parties should get your vote as a landlord and business owner, the National Landlords Association has decided to make it a bit easier for floating landlord voters by compiling a helpful guide to where each of the main political parties stand on key landlord and property related policies.

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Help-To-Buy scheme Is The Deal Of The Century For The Government Government Say Help-To-Buy Scheme Is Creating

 75 New Homeowners A Day

The Prime Minister, David Cameron has been defending the controversial Help-To-Buy scheme, stating publicly that the scheme is creating up to 75 new homeowners a day.

Over 2,000 first-time buyers have made offers on properties using the scheme and the Prime Minister is rubbing his hands with glee because there is a dark secret behind the incentive.

More than £369 Million (GBP) has been lent to new home owners, making the loan figures average £155,000 (GBP) per person. Wages will likely rise with inflation and so will mortgage rates, doing little for the financial security of working homeowners who will be trying hard to pay off the percentage stake in their property that is owed to the Government.

Mr Cameron insisted that the state-backed loans are helping hard working responsible people purchase residential property to live in, and he also dismissed fears over a new housing bubble and taxpayers helping the wealthy middle-classes as nonsense.

What he did not say was what the prospects are likely to be, for people buying property now using the Help-To-Buy scheme, in a few years time.

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Invest In Yourself To Make A Difference in 2013

Invest In Yourself To Make A Difference in 2013

If you want to be truly successful in business, property or whatever you strive to be good at, please read this post as I want to share something with you that I truly believe will make all the difference, as personally, it has really worked for me and I know that it has worked for some other very successful people too.

You may have heard the story below before as it is rumored to be true!

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Buy to let landlords who own rental properties in the North East, Yorkshire, East Anglia and London, should be aware that they will be among businesses targeted by six new HM Revenue & Customs (HMRC) taskforces.

The Association of Residential Letting Agents (ARLA) report that HMRC are likely to focus on private rented sector (PRS) landlords providing temporary accommodation and landlords of Houses of Multiple Occupation (HMO’s) although specific details on the scope of the taskforce have yet to be announced.

It is expected that the taskforce will initially focus on private sector landlords in specific areas, but if the taskforces are successful, their remit could be easily extended to cover the whole of the UK.

In 2011/12, HMRC launched 12 taskforces with up to 30 more set to follow in 2012/13.

The taskforces are a result of the Government’s £917m spending review investment to tackle tax evasion, avoidance and fraud which aims to raise an additional £7bn each year by 2014/15

HMRC are using specialist teams and sophisticated techniques to gather information from across Government departments, and other sources including press and internet advertisements, universities and colleges, to identify individuals who are not paying sufficient tax and the chances of going undetected are increasingly remote.

It is not just unpaid income tax that HMRC are investigating, landlords providing temporary accommodation, perhaps to seasonal agricultural labourers, students or even homeless people, may find that a sizeable VAT liability is incurred.

Some landlords may not realise that VAT is chargeable on temporary accommodation as HMRC tend to treat it in the same way as hotel or guest house accommodation.

Landlords may not be registered for VAT when they should be and so could face a back-dated VAT claim.

The HMRC taskforces undertake intensive bursts of activity in specific high risk trade sectors and locations in the UK.

Exchequer Secretary, David Gauke, said: “HMRC is on target to collect more than £50 Million (GBP) as a result of the taskforces launched in 2011/12. We have made it clear that we will not tolerate tax evasion. Everyone needs to pay the taxes they owe in full. We are determined to crack down on the minority who choose to break the rules. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.”

HMRC’s Director of General Enforcement and Compliance, Mike Eland, said: “These six new taskforces will bring together specialists from across HMRC to tackle tax dodgers. If you have paid all your taxes you have nothing to worry about. But deliberately evading tax you should be paying can land you with not only a heavy fine but possibly a criminal prosecution as well”.

A landmark tax tribunal case has ruled that owners of holiday homes who let them out will be able to claim business property relief and reduce their Inheritance Tax (IT) bills.

This is in contrast to Buy-To-Let properties which are not treated as businesses, despite pressure from groups such as the Residential Landlords Association (RLA).

HMRC had tried to categorise holiday lets with other Buy-To-Let and rental properties, which attract 40% IT on the owner’s death.

However, a tax tribunal dismissed the taxman’s argument that furnished holiday lets should not be considered a business for IT purposes.

It also argued that relief should only be given when the owner had ‘substantial involvement’ with the holidaymakers, and that an ‘intelligent businessman’ would not consider holiday lets to be investments.

Following the ruling, owners of holiday lets will now be able to claim business property relief, which in turn provides relief from IT.

Although the ruling concerned a UK property, it could have implications for those who let properties overseas.

Stephen Barratt, private client director at accountants James Cowper, said the ruling was particularly interesting as there was no clear evidence that the owner in this case had had substantial involvement with the holidaymakers.

Barratt said: “While HMRC can be expected to take their arguments to the Upper Tier Tribunal, as it stands the decision is good news and could open the door to a flood of claimants who have been awaiting the verdict. It could also give people greater certainty in planning their affairs.”

Many people in the UK face long term renting because they cannot afford to buy a home of their own

Landlords Want Long Term Rental Tenants

In the UK long term property renting has become more of a necessity for those who cannot afford to buy a home of their own.
Millions of Britons have already resigned themselves to never owning their own home as they become more comfortable with the prospect of long term renting.

At the end of last year UK residential property rental prices reached the highest level ever recorded at an average £890 per month

This is good news for Private Rented Sector (PRS), landlords, as research from property portal FindaProperty found that

• 54% said that purchasing their own home was very important to them
• 38% said that owning a property is not critical
• 61% said they rent because they cannot afford to buy a home at all.
• 26% said they have no issue with the prospect of long term renting.
• 19%, of renters said they decided against buying a home because they could not afford to live in their desired area
• 11%, saying they choose to rent because of the flexibility it offers.
• 11% said they are waiting for the property market to stabilise before they consider buying.
• 6% have been put off buying because the type of house they could afford would be too small for their needs

For many people the decision to rent is less about finances and more about convenience.

It also found that more than half of the respondents currently renting don’t expect to buy a home until they are aged 40 or over.

Samantha Baden, property analyst at FindaProperty said: “A rented home doesn’t carry the same stigma as it used to. For many people, the decision to rent is based on the flexibility and convenience renting offers, and not necessarily because they can’t afford to buy. There’s no denying that home ownership is still a top priority for many people and for those looking to buy now could be a good time as mortgage rates and asking prices have both come down in recent years. However, there are still millions of people who don’t consider getting a foot on the property ladder as their ultimate aim. In these cases, renting a home can be the best choice for some people and allow them to live the lifestyle they want at a particular time of their lives.”

Landlords and letting agents can reap the benefits of the renting consumer trend by utilising the wide range of services offered to landlords and letting agents by Legal 4 Landlords including, insurance products specifically for landlords, Tenant Insurance, and Rent Guarantee Insurance.

Her Majesties Customs & Revenue (HMRC) is set to expand spot-checks to include landlords and small business owners across the UK in 2012.

UK Landlords and small business owners need to be prepared for an unwelcome knock on the door and a potential investigation into their business activities, by the TAXMAN!

HMRC is planning to investigate thousands more landlords and small businesses in 2012, and is expanding its investigations on several fronts.

The Business Records Check regime, trialled in selected areas of the UK in 2011 will expand its remit to the whole of the UK.

HMRC initially aimed to target 50,000 UK small businesses but have since lowered their expectations to target around 20,000 small businesses and landlords in 2012.

HMRC planned to take on around 90 extra staff in order to help it conduct its investigations, suggesting that it considers the checks to be an important priority.

The purpose of the unannounced visits is to ensure that businesses have kept sufficient records, and that those records back up their tax returns, and that could mean potential trouble for a large number of small enterprises.

Landlords and small business owners that are found to have kept insufficient or inaccurate records could be fined – heavily!

UK landlords have often mused over their immunity to such investigations, until the end of 2011, when the Revenue announced the establishment of a new task force specifically charged with investigating landlords in the North East of England and North Wales, and these investigations will now be extended across the country as part of the Revenue’s continued drive to clamp down on tax evasion, leaving UK landlords with no doubt over their position.

UK landlords are legally obliged to keep comprehensive records detailing rental income and related expenditure. Landlords must keep these for at least six years following the end of the tax year to which they relate. Accurate record-keeping is the most important way in which landlords can protect themselves.

UK landlords should ensure the accuracy of their tax returns. HMRC has dished out fines for relatively minor infractions, and it is therefore important that a landlords tax return is fully supported by detailed records.

The latest Bank of England survey of households concludes that the UK’s recovery from the recession of 2009 has been slowed by falling consumption reflecting the challenging environment facing households.

The BoE data suggests most households have experienced an income squeeze over the past year, with many responding by looking for a new job or simply working longer hours.

The survey was conducted on 1,985 households and undertaken 23rd – 29th of September (before the worst period of the Eurozone crisis), using computer assisted personal interviewing.

The BoE survey showed 48% of respondents felt the UK government’s budget cuts have affected household income, 34% said they were not “heavily affected” while 18% hadn’t thought about it.

Some 69% of respondents felt government cuts would impact them in the future.

The biggest impact appears to have been from higher taxes, which 23% of people said they had noticed, while 19% mentioned lower income. 7% said they had lost their job although 19% said they expected to lose their job in the future.

The Bank of England noted in their report that: “Unemployment has remained higher than before the recession, and credit conditions are still tight.”

The BoE says its response has been to maintain interest rates at their record low of 0.5% since March 2009 and, as a further stimulus, it has purchased £275 Billion (GBP) in government debt in the process known as Quantative Easing, (QE).

The Chancellor of the Exchequer, George Osborne, believes the UK economy will grow 0.9% by the end of this year, (2011) and just 0.7% in 2012

Calculate PRS income

Bank of England Look to the Private Rented Sector

David Miles, A member of the Bank of England’s MPC has suggested that the housing market will never go back to what it was and the private rental sector is key to Britain’s changed housing market.

Home ownership is beginning to take the back seat as more and more people choose to rent property. This is in part blamed on high deposits required for property purchases due to UK banks limiting their risk elements, refusing to offer larger mortgages and introducing much stricter lending criteria.

David Miles is of the opinion that the UK’s economy might stablise if Britons were less dependent on changes in house prices and mortgage rates.

Mr Miles said “The credit crunch has created a new world where there will be a lower rate of owner occupation and a bigger rental sector.  I don’t think we should regret the fundamental change in the housing market caused by the credit crisis, and renting property could be of benefit to the overall UK economy.

Mr Miles had previously led an official inquiry into the UK mortgage market, and he also cautioned against a return to banks offering mortgages to borrowers with small deposits, saying “Housing markets and mortgage markets have been close to the centre of the economic and financial turmoil we have lived through over the past four years. I do not believe that the housing market or the mortgage market will get back to where we were in the years leading up to the crisis. I also do not think we should regret that.”

David Miles also highlighted the benefits to the economy of renting property, rather than buying homes and reckoned that tenants in rented property could move more easily for new jobs, thus lowering the risks of structural unemployment. “It will take time for first-time buyers to accumulate larger deposits, so they will typically buy later and the share of home ownership will be lower. But in the longer run, it is not at all clear that a lower rate of home ownership represents a big loss to society.”

Recent updates to the HMRC Trusts, Settlements and Estates Manual means big changes for UK investors and landlords

HMRC Trusts & Estates has published new guidance on the taxation of income from property. The guidance can be found in the Trusts, Settlements & Estates Manual (TSEM) at TSEM9000 to 9978.

TSEM9000 – Ownership and Income Tax

Most of this guidance is brand new and has not featured previously in a HMRC manual. It covers the taxation of rental income, bank and building society interest and dividends.

It provides legal background to the subject of ownership of property, and includes guidance on express and implied trusts. It also gives examples illustrating the principles of ownership and joint ownership in the context of taxation of income.

Part of the guidance in the section TSEM9800 to 9874 – Property held jointly by married couples or civil partners – replaces and updates guidance in the Independent Taxation Manual (IN) at IN115-144. This will be withdrawn later this year

The update of this guidance has meant that form ’17 – Declaration of beneficial interests in joint property and income’ has also been updated.

The new form is now available on the HMRC website from the link below.

The guidance and form both state that evidence of beneficial interest must be submitted along with any form 17 declaration.

Previously HMRC had asked for evidence only in the case of bank and building society interest. The evidence requirement now applies to declarations in respect of all types of property.

Form 17 Declaration of beneficial interests in joint property and income

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