Holiday lets loophole to be closed to prevent tax evasion
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Landlords and second-home owners have been told to pay council tax if they can’t prove that their properties are genuine holiday lets after the government announced it was closing a tax loophole.
Some owners currently claim their often-empty properties are holiday lets to avoid paying council tax and access small business rates relief by declaring an intention to let the property out to holidaymakers.
Following concerns that many never actually let their homes and are unfairly benefiting from the tax break, from April 2023, second homeowners will have to prove holiday lets are being rented out for a minimum of 70 days a year to access small business rates relief, by providing evidence such as the website or brochure, letting details and receipts.
Properties will also have to be available to be rented out for 140 days a year to qualify for this relief.
Privileged positions
Secretary of State for Levelling Up, Michael Gove (pictured), says: “We will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost.
The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.”
A government consultation revealed that the overwhelming majority of respondents agreed that the current criteria should be strengthened.
Some tourism trade bodies argued that it gave second homeowners who might let out their property on an ad-hoc basis, an unfair commercial advantage over professional businesses.
Owners of holiday lets that can’t meet the strengthened criteria have been warned to notify the Valuation Office Agency as soon as possible so that their property can be assessed as domestic and revert to a council tax valuation – or risk a large, backdated council tax bill.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Holiday lets loophole to be closed to prevent tax evasion | LandlordZONE.
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HMRC gives Self-Assessment taxpayers more time to ease COVID-19 pressures
HM Revenue and Customs (HMRC) has decided to waive late filing and late payment penalties for Self-Assessment taxpayers for one month – giving taxpayers the extra time, if they need it, to complete their 2020 to 2021 tax return and pay any tax due.
HMRC says it recognises the pressure faced this year by Self-Assessment taxpayers and their accountant.
This years as a one-off the penalty waivers give taxpayers who need it more time to complete and file their return online and pay the tax due without worrying about receiving a penalty.
The deadline to file and pay remains 31 January 2022. The penalty waivers will mean that anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February
For anyone who cannot afford to pay their Self-Assessment tax by the 31 January deadline, they will not receive a late payment penalty if they pay their tax in full, or set up a Time to Pay arrangement, by 1 April.
Interest will be payable from 1 February, as usual, so it is still better to pay on time if possible.
See: HMRC gives Self Assessment taxpayers more time to ease COVID-19 pressures
If you cannot afford to pay your latest bill then you can set up a payment plan to spread the cost of your latest Self-Assessment bill if all the following apply: you owe £30,000 or less you do not have any other payment plans or debts with HMRC your tax returns are up to date it’s less than 60 days after the payment deadline.
You can choose how much to pay straight away and how much you want to pay each month. You will have to pay interest.
See: Pay your Self Assessment tax bill
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – HMRC gives Self-Assessment taxpayers more time to ease COVID-19 pressures | LandlordZONE.
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BREAKING: Landlords left out of cladding remediation fund initiative – for now
Housing secretary Michael Gove has revealed that landlords will not be included in the cladding remediation fund initiative for affected residential tower leaseholders announced this week.
A hint of this was given in the original announcement that the £4 billion ‘fund’ to remediate cladding on towers under 18.5m but over 11m tall would be for ‘leaseholders living in their own flat’.
But his officials have now confirmed that Gove has decided that the funding will be targeted initially at owner-occupiers and that ‘negotiations…will explore whether this support should extend to other leaseholders such as landlords’.
In a statement released today, Gove says: “We have scrapped the proposal for loans so that leaseholders living in their own medium and high-rise buildings should not pay a penny to fix dangerous cladding.
“We will work with industry to ensure that the support is directed firstly at those leaseholders living in their own homes.
“Working with members of both Houses, we will look to bring a raft of leaseholder protections into law through our Building Safety bill.
“And we will restore much needed common sense on building safety assessments, ending the practice of too many buildings being declared unsafe.”
“More than 4 years after the Grenfell Tower tragedy, the system is broken.
“Leaseholders are trapped, unable to sell their homes and facing vast bills.
“But the developers and cladding companies who caused the problem are dodging accountability and have made vast profits during the pandemic whilst hard-working families have struggled.”
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Landlords left out of cladding remediation fund initiative – for now | LandlordZONE.
View Full Article: BREAKING: Landlords left out of cladding remediation fund initiative – for now
Gove closes business rates for nonholiday holiday homes
Homeowners who leave properties empty while pretending to let them to holidaymakers will be targeted by HMRC under the new rules that holiday lets must be rented out for a minimum of 70 days a year to qualify for business rates.
The post Gove closes business rates for nonholiday holiday homes appeared first on Property118.
View Full Article: Gove closes business rates for nonholiday holiday homes
Letting agent not responding to my hand-delivered letter
I am a first-time Landlord and the Letting agent does not respond to my hand-delivered twice repeated letter regarding a tenant complaint.
As I live in the same block of flats, I dealt with the tenants’ failed immersion heater within 2 days.
The post Letting agent not responding to my hand-delivered letter appeared first on Property118.
View Full Article: Letting agent not responding to my hand-delivered letter
‘Think carefully’ before going ahead with EPC upgrades, warns expert
An energy expert has sought to reassure landlords that they may not need to spend huge sums retrofitting their properties to raise EPC ratings – at least not in the short term.
Jonathan Murton (pictured), director of energy efficiency consultants Murton & Co, says landlords should think carefully about how they spend their money as some retrofit measures won’t have as much impact on an EPC.
As electricity is considered a dirty fuel, for example, putting solar panels on a property could have a more significant impact on its rating than improving wall and window insulation, he tells LandlordZONE.
Under Minimum Energy Efficiency Standards (MEES), EPC regulations are being revised so that the minimum rating (currently a band E) will become a band C from 1st April 2025.
This means that landlords will need to upgrade their properties to achieve an EPC band C before they can grant a tenancy. But the government has said that eventually, these properties will have to attain a ‘B’ rating.
But Murton adds that if works are estimated to cost more than £3,500, landlords can apply for a five-year exemption, while changes to building regulations set for June mean that they could find themselves with a better EPC rating if they get an assessment in July.
No guarantee
One worried landlord shares many others’ concerns that EPCs are not ‘fit for purpose’ when he says that even if a property has roof insulation, double glazing and a modern combi-boiler along with LED lights, it won’t guarantee a C-rating on an EPC.
“Many private, council, social housing and private landlord properties are not capable of meeting a C as an EPC rating, no matter what improvements are done to them,” he says.
Murton admits that while the EPC system is not perfect, it’s the best tool to quickly identify the energy performance of a particular building and how this compares with other buildings.
He adds: “It’s true that whatever you do to some houses, they might not get a C rating, however landlords should talk to their local energy assessor and interrogate the EPC to work out an investment strategy.”
Read more about EPC confusion among landlords.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Think carefully’ before going ahead with EPC upgrades, warns expert | LandlordZONE.
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It’s time to sell your buy-to-lets. This company will do it in 7 days so you can sit back and enjoy 2022
2022 has begun, and if 2021 taught us anything, it was that this is the year we all want to let go of the stress, cash in our portfolios, relax and enjoy life.
Many of us have spent the last 10 to 20 years building up our portfolios, however with mounting tax bills just around the corner, and constant hoops for landlords to jump through, it’s time to let go of that stress, free ourselves from managing portfolios, cash in and retire. It’s simple: there’s never been a better time to sell your buy-to-lets than right now whilst the market is still high, and portfolio exit specialists Landlord Sales Agency are the ones to do it.
Established by co-founder of the National Association of Property Buyers and industry expert, David Coughlin, they shot to success as the best company out there to sell high asset Landlord buy-to-let portfolios for the highest price. And as they’re owned by a Landlord himself who recently cashed in, they know exactly what it takes to deliver what you need: a big lump sum in the bank, and the financial freedom to do whatever you want.
From £1 million to £10 million plus portfolios, they’ll ensure you get the highest price in the fastest time.
- They’re the best for sellers with prime stock in London and the South East.
- They have a ready-made list of hundreds of cash buyers ready to buy your portfolio for the highest price.
- Their fast sale option is efficient and delivered to a standard of excellence, getting you 80% – 90% of the market value of the portfolio, a huge bang for your buck for a sale that takes less than a week.
- They can fix any problem to get you a sale in days, even tenant issues.
With a team of 20 years of experience in selling properties specifically for Landlords, plus experts who have personally got over the line 2,500 properties, they’re unrivalled. Be it tenant issues, mortgages, access issues, absolutely nothing is standing in their way from getting Landlords the highest prices in record times.
They’re a team who knows exactly what they’re doing, and they’ll get it done for you. So contact them today. It’s 2022, and there’s never been a better time to sell up and cash in than January.
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LATEST: Welsh government widens £10m rent arrears fund to include more tenants
The Welsh government has widened its £10 million Tenancy Hardship Grant scheme to include all tenants renting privately or socially who have built up rent arrears during the pandemic.
Announced in July last year, the scheme now covers tenants who have got into arrears between March 2020 and December 2021.
Originally, the scheme only covered rent arrears built up prior to June 30th 2021.
The widening of the scheme’s scope is designed to include tenants who have lost their jobs or income after the furlough scheme ended in September last year, or who suffered a significant decrease in income when the Universal Credit uplift was removed by the UK Government, may now be eligible under the new criteria.
Other examples of rent arrears as a direct result of the pandemic include a loss of income due to lockdowns or because of becoming ill with Covid-19.
Ruth Power (pictured), CEO of Shelter Cymru says: We welcome the changes to the Tenancy Hardship Grant announced today.
“Widening the eligibility criteria will mean more people, who are struggling during the pandemic to pay their rent, are able to access support to keep their homes.
“Our advisors are working with people across Wales whose incomes have been seriously affected by the pandemic and who are really worried about the future.
“Getting money quickly to people in need will prevent families from becoming homeless.”
The Welsh government has published details of a 50-year-old tenant in Rhondda Cynon Taf who, after his income dropped from £1,300 a month to £700 during Covid, got £5,000 into arrears with his rent
He was not evicted from his home during time and, after applying to the fund, the money was paid direct to his landlord.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Welsh government widens £10m rent arrears fund to include more tenants | LandlordZONE.
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Rogue landlord who ignored HMO rules to pay £64,000, says judge
A rogue landlord has been ordered to pay more than £64,000 for illegally converting an HMO in Barking and then ignoring a planning enforcement notice.
Sumon Miah, of Mortimer Terrace, Highgate, was found guilty of the offences at Barkingside Magistrates Court last July and has now been fined £15,000 along with costs of £12,573 and handed a £37,000 Confiscation Order under the Proceeds of Crime Act – representing the criminal benefit made from renting the property out.
In summing up, the judge said the sentence reflected Miah’s persistent disregard of the enforcement notice for the property on Ripple Road (pictured) and the fact he had bought the property on Ripple Road, Barking, as a vehicle to generate income and subsequently illegally converted it into an HMO.
Warning
Councillor Margaret Mullane (pictured), Barking and Dagenham Council cabinet member for enforcement and community safety, hopes the case sends out a warning to all landlords who are not following the rules.
She says: “This has been a complete disregard for the rules put in place when it comes to planning enforcement and HMOs. And as Mr Miah continued to ignore the enforcement notice handed to him, he now has to stump up a huge amount of cash.”
Miah has three months to pay the fine and if he fails to do so, will serve a 12-month prison sentence; if the Confiscation Order isn’t paid within three months, he will serve a two-year sentence.
Barking and Dagenham’s licensing scheme covers all private landlords who must be registered with the council, which is a keen chaser of miscreant landlords through the courts.
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rogue landlord who ignored HMO rules to pay £64,000, says judge | LandlordZONE.
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‘Use a letting agent to avoid getting stung like me’ warns landlord facing £14k arrears
A landlord who is owed £14,000 in rent arrears and is in the throes of trying to evict his errant tenant has warned others to use professional letting agents to protect their investments.
The tenant, a former friend, has always been on benefits that were originally paid directly to landlord Max Ferzoli until a few years ago.
Problems started in 2020 when he stopped paying and Ferzoli tried unsuccessfully to get the DWP to revert to direct payments. Civil servants refused to switch to direct because they said Ferzoli didn’t have his tenant’s consent to do so – a common problem LandlordZONE has highlighted many times before.
Ferzoli served a Section 21 followed, with Landlord Action’s help, by a Section 8 in March 2021 and finally got a possession order last November.
As the tenant just stayed put, he has the bailiffs ready to step in next week, but the frustrated landlord reckons his tenant’s past history and unpredictability mean it might not go to plan.
‘Awful situation’
“We started out as friends and I didn’t take a deposit – based on trust – which was admittedly amateurish,” he tells LandlordZONE. “It’s an awful situation – I’ve pleaded with him to pay me the money and even let him off paying a rent increase as a favour but it didn’t help.”
Ferzoli, who’s self-employed, already has possession of the downstairs flat at the property in Hounslow and when his tenant leaves the upstairs flat, aims to convert it into an HMO so he can spend some money on updating the electrics and then get a better return.
However, he’s now reluctant to take any more benefit claimants: “Another tenant recently left me with £7,000 worth of repairs after trashing the property which cancelled out the capital appreciation,” he adds.
“I plan to only use letting agents in future and do most maintenance myself to save money. It might be cheaper not to go through an agent but if it all goes wrong, it’s more expensive in the long-term.”
©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Use a letting agent to avoid getting stung like me’ warns landlord facing £14k arrears | LandlordZONE.
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