Will HMRC digital tax scheme not be fit for purpose as trial proves unpopular?

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Fears have been raised that landlords’ needs won’t be properly served by the new digital tax system for self-employed people due in 2024 after it was revealed that only nine people are taking part in the pilot.

HMRC admitted a sharp decline in the uptake of volunteers to test the new software since the trial began three years ago when 900 people signed up to take part, leading to concerns that the system might not be robust, reports the Financial Times.

Making Tax Digital for Income Tax will be used by 4.3m self-employed people from April 2024. Under the new system, about a third of taxpayers who are self-assessed and have either income from a business or property exceeding £10,000 per year will have to keep digital records of their earnings and expenses.

These will have to be filed to HMRC every quarter, using third-party software, instead of submitting an annual tax return.

Software providers and tax professionals said several factors were making it difficult to attract volunteers to join the pilot, including HMRC’s decision to limit it to volunteers who only have property or trading income.

Tax changes

Anish Mehta, managing partner at APARI, one of HMRC’s approved software providers for the new system, says landlords are often on the receiving end of tax changes.

“We want the MTD changes to be designed for landlords,” Mehta tells LandlordZONE. “Our concern with limited testing is that HMRC won’t understand what landlords need. For example, many landlords have other sources of income.”

However, he adds that most of the limited testing has been done by APARI users. “We’re very confident in our solution. One feature of MTD is that employment or pension income information can be pre-populated into APARI by HMRC.” 

HMRC said it had always planned to keep the initial numbers in the pilot low so it could “provide additional support to the first customers in the service before testing at scale”. It added that it planned to open up the trial to more people from April.

Listen to our recent webinar on the MTD initiative.

Read more about the MTD deadlines.

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OFFICIAL: Ending of ‘Plan B’ Covid restrictions removes threat of another evictions ban

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Housing Minister Eddie Hughes has revealed that the government is not considering introducing more evictions restrictions, but warns landlords in England that longer notice periods might be brought in up until 25^th March. 

In a written question, Lilian Greenwood MP asked Hughes if the Levelling Up, Housing and Communities Department had considered the potential merits of reinstating measures to have court eviction proceedings stayed and extending the minimum notice period for section 21 evictions from two to four months ‘while tenants and advice services were still being affected by the spread of the omicron variant’.

Hughes said while the measures the government had taken at the start of the pandemic to help renters stay in their homes had worked – with fewer rough sleepers and possession claims being made – it continued to monitor the situation using public health and homelessness data, along with repossession statistics.

No plans

“There are no current plans to reintroduce the emergency measures to delay evictions given the wider lifting of national restrictions, the success of the vaccination roll-out and the impact that these measures have on landlords,” said Hughes.

“Bailiffs must, however, provide at least 14 days’ notice of an eviction and will not carry out an eviction if they are made aware that anyone living in the property has COVID-19 or is self-isolating.”

He added: “We have also retained the power to reintroduce longer notice periods until 25^th March 2022 if needed and significant support is available to renters through the welfare system.”

Read more about the evictions ban.

Learn more about the evictions process.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – OFFICIAL: Ending of ‘Plan B’ Covid restrictions removes threat of another evictions ban | LandlordZONE.

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LATEST: Successful year ahead for buy to let borrowers

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The year 2022 is expected to be another successful year for buy to let mortgages as tens of thousands of fixed-rate mortgages are due for renewal. Our mortgage partner, Hamilton Fraser Total Landlord Mortgages, explains.

Lenders are rubbing their hands with glee as fixed-rate terms for mortgages written between December 2016 and January 2018 will expire this year and landlords start hunting for a new rate. The mortgage market is expected to become even more competitive as landlords try to find new deals to keep their repayments low whilst the Bank of England increase interest rates to fend off rising inflation.

The Bank of England increased the official interest rate to 2.5 per cent last month (from 2.35 per cent). This is the highest rate since March 2020 when the rate plunged from 0.75 per cent down to just 0.1 per cent.

The hike seems to have had little effect on buy to let mortgages, with the average deal floating around a 1.68 per cent interest rate mark according to figures from mortgage monitor, Property Masters. However, with inflation expected to keep rising in the short term, lenders anticipate that mortgage rates will float up with them.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back to speak to one of our fully regulated advisors and secure the best deal.

Buy to let by numbers: January 2022

A snapshot of the buy to let mortgage market this week shows:

• 1,976 mortgages available
• 100 high loan-to-rate deals at 80 per cent loan-to-value
• 688 loans at 75 per cent loan-to-value
• 322 mortgages at 60 per cent loan-to-value

Interest rates vary, mainly depending on the loan-to-value borrowed, but how does this compare to 2021?

Interestingly, some lenders have already tweaked their products since the interest rate hike, for example:

• Paragon has cut rates
• Metro Bank has increased maximum loan amounts
• Accord have scrapped the minimum income levels

To take advantage of the best offers at the moment, call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

Pandemic brings mixed fortunes

The pandemic has brought mixed fortunes for landlords enjoying higher rents but hit by the rising joblessness among tenants.

The loss of income has resulted in around 840,000 tenants falling into rent arrears, with one in five owing £1,000 or more, says the National Residential Landlords Association.

At the same time London prestige property consultants, Hampton International, report buy to let rents were up an average of 4.1 per cent across the UK to £1,035 a month, an increase of £41 a month.

The firm also revealed the number of tenants seeking to rent broke through 2019 levels for the first time since the start of the pandemic.

Looking at the wider property market, the number of homes for sale is 43 per cent below the five-year rolling average, while tenant demand is 55 per cent higher. Each letting agent branch has 82 tenants signed up and chasing a new home, according to data from trade body the Association of Residential Letting Agents (ARLA) released in November 2021.

This number is highest in the East Midlands (134 tenants) and lowest in Wales (26 tenants).

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here.

What to expect in 2022

Total Landlord Mortgages is upbeat about the year to come.

“This year, we expect to see more landlords assessing their portfolios with the fear of further interest rate rises ahead or the increase in inflation. The five-year fixed-rate mortgage is still incredibly attractive, and this may trigger more landlords to lock in low rates now whilst they are available,” said Dan Lee, principal at Total Landlord Mortgages (pictured).

“We also expect additional products linked to greener properties, such as demanding an Energy Performance Certificate (EPC) ranking of A-C, so reviewing your current mortgage and raising finance to fund any changes needed may be a good option.”

Lastly, mortgage rates and inflation are not the only things going up in the property world. The good news is many landlords can borrow more as their equity has increased in line with house prices over the past year. The latest figures from Halifax show the average house value in the UK reached a new high in December 2021 of £276,091.

Call Total Landlord Mortgages today on 0333 224 8918 or request a call back here

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Successful year ahead for buy to let borrowers | LandlordZONE.

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Buy to Let (BTL) VS Property Development

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Should you invest in Buy to Let (BTL) or property development as your property investment strategy?

This video has the answer.

Not only will I go through the advantages and disadvantages of Buy-To-Let and UK Property Development

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Letting agent closed their office?

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Hi – my letting and managing agent closed their local office and made the staff redundant, without informing me, or other landlords and tenants.

They tried to keep it secret, by re-routing phone calls and emails and saying the local manager was away

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30,000 strong list of Buy-to-Let and portfolio buyers is growing at a record rate

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This last year has been an incredible one for Landlord Sales Agency. From entering the market as the top landlord portfolio exit specialists to delivering on our promises to Property118 landlords to sell their entire portfolios, we’ve seen success stories time after time.

View Full Article: 30,000 strong list of Buy-to-Let and portfolio buyers is growing at a record rate