Property Tax Advisers
Providing Solutions to your Property Tax Issues Since 2010
A huge tax bombshell
The announcement in the July 2015 Budget that, starting in April 2017, residential landlords operating in a non corporate capacity, will no longer enjoy full tax relief on mortgage interest.
Please refer to case studies 4 and 5 to see how the new rules, being phased in over a period of 4 years, will make it unviable for some larger landlords to continue to operate in a sole trader or partnership capacity.
But incorporation is not right for everybody. For John in case study 4 it was a ‘no brainer’ and he began operating as a limited property investment company with effect from 01/04/2016, thus, avoiding the 3% SDLT hike.
Many landlords are banking on QC Cherie Blair’s Omnia Strategy firm challenging the Government’s right to impose the new restrictions on landlords, contesting them to be an infringement of human rights.
Will the Government back down? It seems unlikely. It is suggested that the restriction will net the Treasury £1 billion P/A by 2021 when the restriction is fully operational. The 3% increase in SDLT from April 2016 and the failure in the March 2016 Budget to extend the 8% cut in CGT to the disposal of residential property is a clear indication that Government sees landlords as an easy target.
In his testimonial on the blog page of this site, landlord JC from Leeds, stated ‘I know exactly where my business is going, how much money I can personally extract from the company & how much should be left in to help pay off existing mortgages or to expand the business’ as a result of his incorporation review.
However, following another review for PP, a fellow full time residential landlord from Leeds (testimonial on the ‘Why use us’ page) I concluded that incorporation was not right for him & his wife. Repayment of student loans and the jeopardisation of child benefit were issues but alternative options will be pursued.
It is vital that you know how the changes will impact on you and what you should do about it. Everybody’s circumstances are different which means that each landlord requires their own tailored solution.
From just £320 we will provide you with your own unique solution so that you know where your property investment business is going in the coming years of multiple tax changes.
Don’t forget – signing up for a review will also allow you to access our library of resources.
As a new client, when you first contact us, we will have an in depth conversation with you to agree which services you require from us.
Remember this will be a free initial chat for which there will be no charge if we can sort out your tax issue there and then over the phone.
If you are a property investor we can take away the hassle and worry of Self-Assessment with our tax return service from as little as £120 including VAT. You can even pay in monthly instalments after the 1st year at no extra cost. Please see fee indicator table below:
Getting in touch is easy for your property tax advice and UK property tax planning:
• Email: email@example.com
• Email: firstname.lastname@example.org
• Tel: 01274 214979
• Mob. 07939 222437
Our Self-Assessment tax return service will:
deal with all your tax affairs no matter how complicated (excluding self employment)
include employment income, pensions, benefits and expenses
plus capital gains, investment, rental & overseas income
complete your tax return and all necessary schedules
provide you with a full copy of the return, calculation of liability/refund plus a covering letter confirming due dates and how/when to pay etc.
file your return online to H M Revenue & Customs (HMRC)
deal with HMRC on your behalf
be available for all your tax queries and questions
*If you are in receipt of self employed income please contact us so that we can discuss your requirements and provide you with a competitive quote.
Obviously, the cost will, ultimately, be determined by the format in which you provide us with your records. If you let us have a carry bag full of receipts or we have to chase up your letting agent for relevant details, this will be more time consuming & incur you a larger fee than if you provide your full details in an orderly format and in good time to comply with the tax return deadline.
We will always confirm our fees with you in writing before commencing any work.
If you are happy to proceed, we will contact HMRC to advise them that you have instructed us to commence acting as your tax agent. HMRC will post a security code to you to provide to us which, when activated, will allow us to liaise with HMRC on your behalf.
We will send you our engagement letter, schedule of services plus T & Cs. This is in accordance with the Chartered Institute of Taxation (CIOT) guidance and forms the contract between us. We will also take suitable identification at this point for regulatory purposes.
You are now a client of our practice, and will be able to access our library of resources.
For current clients, the agreed fee will continue to apply until we discuss and agree a new fee with you. Clients therefore have peace of mind that they will only ever receive a bill for a fee that they have agreed to.
If your circumstances change significantly, we will discuss and agree any proposed fee change with you. We will fully explain any proposed fee change to you, and ask for your agreement to it.
Every few years, we may propose a modest inflation-related fee increase. Again, we will ask for your agreement to any fee change.
Bills are due for payment 14 days after issue. We do respectfully ask clients to pay bills on time as it is embarrassing for both parties if bills need to be chased.
If you are happy to proceed on to our monthly payment by instalment option this will have the added benefit of locking down your fee at current year rates for a period of 3 years.
In tax repayment cases, we can apply to have the refund paid from HMRC direct into our client bank account, deduct our fee and repay the balance to you.
Charges for tax planning depend very much on the particular individual circumstances.
You can rest assured that we offer the same fixed fee, no hidden charges or additional extras policy for any work that you may require. As a guide, in 2016/17, tax planning charge out rates are £80 per hour (including VAT), discounted to £600 per day for 8 hours.
Please do not hesitate to contact us to discuss your situation with us free of charge and without obligation. We can then give you our proposed solution and the charges involved.
Working with existing accountants
You may be totally satisfied with your own accountant in dealing with your day to day affairs but want the security of an experienced tax professional to ensure that you are ‘not missing a trick’. We are happy to work with your existing accountant and offer a ‘rolling contract’ service specifically to cover on-going work.
This consists of paying a monthly fee of £150 (including VAT) for 2 hours time. Minimum period is 3 months. If you do not use your time up in month 1, it will be carried forward to month 2, 3 but must be used up inside 6 months of the commencement of the contract.
Alternatively, a one off fee can be agreed based on £80 p/h.
Don’t forget – signing up as a client will allow you to access our library of resources.