REVEALED: ‘Lifetime deposit’ options being considered by Ministers

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A property industry trade organisation has outlined how lifetime deposits might work, ahead of the publication of the Renters’ Reform Bill next year.

Propertymark believes that these should be known as a tenancy deposit passport rather than a lifetime tenancy deposit – otherwise it implies that the tenant will spend their whole life renting.

It has come up with suggestions in The Future of Renting position paper which also includes proposals on energy efficiency targets and digitalising possession claims.

It says tenant deposit passporting should include a range of options such as a tenant guarantee bridging loan or insurance policy via a tenancy deposit scheme, deposit builder ISA, and encouraging employers to offer a deposit loan scheme.

With a tenant guarantee arrangement, once a tenant has paid a full deposit and they move on and rent another property, the deposit protection scheme retains the money, any deductions are made, and the remaining money is held by the scheme for the next tenancy.

The tenant buys an insurance policy or gets a bridging loan from the scheme which is used to claim against any deductions.

Alternatively, a government-protected savings pot could be made available to renters using a deposit builder ISA.

Applicants would be able to demonstrate that the funds were in the account at the start of the tenancy and the account could be associated with a tenancy deposit scheme to resolve disputes. Tenants would also be able to save in this account, eventually using the funds for a deposit to buy their own home.

Work loans

According to Propertymark, the government should be doing more to encourage employers to offer staff an interest-free loan to pay for their deposit.

It says that with a deposit loan scheme, companies and organisations would be provided with guidance on how to package financial wellbeing benefits and information to employees in a more helpful way. Repayments could be made in instalments via deductions from a tenant’s monthly salary.

It also believes there could be wider use of deposit bond schemes – a written agreement between a local authority, the landlord or letting agent and the incoming tenant.

Hotly awaited

“The update from the government in respect of ‘lifetime deposits’ is hotly awaited by landlords, tenants and agents alike,” says CEO Eddie Hooker (pictured) of Hamilton Fraser. 

“In reality, the solution may well be an amalgamation of all the ideas discussed in the Propertymark report.  But probably more important is the requirement to improve the current deposit regime, making deposit protection more transparent, easier to administer and quicker to release deposits.”

Read the report in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – REVEALED: ‘Lifetime deposit’ options being considered by Ministers | LandlordZONE.

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Who’s liable if my tax isn’t right?

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Many landlords submit their self-assessment tax returns either via software or their accountant but one of the questions that we’re frequently asked is ”who’s to blame if my tax is wrong?”.

We’re not saying that people are deliberately misinforming HMRC of their tax position (unfortunately some people do) but mistakes can happen.

And a tax enquiry by HMRC, however unlikely, can be a costly exercise if your tax return is incorrect.

But who is liable if there is a mistake or mis-calculation?

Not to sound too sarcastic, the short answer is in the name – you are required to ‘self-assess’ your tax liability.

If you have submitted your return through an accountant, or with software, it’s likely that you have had to sign something, or tick a box to confirm that the information in your tax return is true and honest to the best of your ability and knowledge.

This might seem like just a hoop to jump through to submit your return, but really it’s confirming that you take full responsibility for the information you are about to share with HMRC.

But what if my accountant makes a mistake?

This is a tricky one – and we are in no way lawyers or legal experts. Accountants are usually thorough and careful with any of your financial data, providing that they have been given all of the appropriate and correct information.
Most practices will offer some sort of Tax Investigation insurance to cover the cost for their time – whether this will cover the cost of any miscalculated tax will depend on the policy taken out.

This also highlights the need to check and review the calculation sent to you by your accountant – never just assume that it’s correct.

What about software?

The thing about software is that it’s just a very clever calculator, with several convenient features to make your life easier (have you seen our new snap and store feature?) so the accuracy of that calculation again relies on the correct input from you, the taxpayer.

The good thing about APARI software is that we do everything possible to ensure that you do input the correct information – from our helpful In-Software reminders, to our FAQs and community blog, we aim to offer as much information as possible to our users so that they can get the most accurate tax calculation as possible.

But (and I know, we’re repeating ourselves) it is still your responsibility to check that the information you are submitting is correct (remember standard and premium APARI users do have access to support from an APARI tax nerd if they feel that they do need some help).

And we have now released a product designed to make calculating and submitting your tax return even easier. Check out our new Simple Self-Assessment here.

What if I make an error on my tax return?

People make mistakes for a number of reasons, so don’t panic. If you realise that you have made an error on your tax return, then inform HMRC as soon as possible by resubmitting your tax return.
If the new calculation incurs a higher tax liability than the original submission, then you should also pay the balance outstanding – you many be issued an interest charge on the outstanding amount

So the moral of the story? CHECK YOUR TAX RETURN FIGURES.

Because no matter your choice of submission route, or level of liability, you are the person responsible for your tax submission being correct.

Did you watch the APARI & LandlordZone Webinar? Don’t worry if you missed it – you can watch the webinar in full, and read all of our answers to your questions here!

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Who’s liable if my tax isn’t right? | LandlordZONE.

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ANOTHER council expands HMO licensing despite opposition from landlords

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Sandwell Council in the West Midlands is the latest to introduce an Additional Licensing scheme for HMO properties, one of several to be announced in recent weeks across England.

Its cabinet is due to rubber-stamp the proposals following a 12-week consultation, which will see all HMOs within West Bromwich town centre and beyond to be licenced, rather than just large ones housing five or more people.

Under the proposals, which will see the scheme go live in April, landlords of all HMOs regardless of how many people are living there will need to apply for a licence at a cost of £850 for a five-year period. This will not be the most expensive scheme – Lambeth in London recently introduced a similar scheme with fees of up to £2,024 per property.

It is expected that councillors will today vote through the licensing plans which – following feedback from landlords, tenants, residents, businesses and local and national campaign groups – was supported by three-quarters of those canvassed.

However among the approximately 600 people canvassed, 61% of landlords disagreed with the scheme, half thought it would have a negative impact and 80% said the proposed fees are unreasonable.

The council claims that, although there are ‘numerous high-quality landlords within the borough… some do not provide adequate accommodation or management of their properties’.

Poorly managed

Councillor Zahoor Ahmed, Sandwell’s cabinet member for housing, says: “We want to improve housing conditions and make sure that landlords are providing good quality and safe HMOs, so that tenants are protected.

“While we know that many already do this, there are still too many properties that are poorly managed and are in unsafe and unsatisfactory conditions.

“A new approach is needed and we believe that the Additional Licensing Scheme will improve the condition of properties, support good landlords and remove rogue landlords from operating.”

But not all agree with this approach – as Rightmove’s legal director recently said at an industry conference that there was little evidence that licensing improved housing stock or landlord behaviour.

“All they have done is divert resources in local authorities who are already cash strapped and overburdened with regulatory administration,” he said.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ANOTHER council expands HMO licensing despite opposition from landlords | LandlordZONE.

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HM Land Registry October house Price Index

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The HM Land Registry House Price Index released today for October is indicating the average price of a property in the UK is now £268,349 up 10.2% from last year. Month-on-month October saw prices actual fall 1.1%. However, the monthly index figure compared to baseline January 2015 of 100 for the UK was 140.7.

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