The hours spent searching for the right property have finally paid off . It ’ s in your sights – but what to do next ? Our experts will help pave the way – and protect your wallet from any unforeseen surprises
Paul Watson Director - Passman Leonard p . watson @ passmanleonard . co . uk Tel : 07834 323400
Crown House 72 Hammersmith Road , W14 8TH Tel : 01895 434 515
www . passmanleonard . co . uk
Landlords are under the cosh . The increase in stamp duty , loss of the wear and tear allowance , and the cut in mortgage interest tax relief has hit hard . And there are still choppy waters ahead , says accountant Paul Watson .
HMRC is axing the dreaded annual tax return in favour of a new , fully digital system . Should landlords welcome the change ? From April 2018 , they will be required to submit quarterly returns , paying tax as they go , plus a final fifth return for any mopping up adjustments . This means the taxman receives tax sooner and has more evidence for enquiries – and landlords have less ability for retrospective tax planning .
How will the new system work and what will the taxman be looking for ? It will trawl through databases like the Land Registry and the DVLA , allowing the HMRC to check if landlords have declared rental income and disposals , profiling their lifestyle to see if it matches their income level . For instance , if you buy a sports car , the system could raise a flag if it deems you couldn ’ t afford it based on the income you ’ ve declared . The HMRC will also have direct access to be able to review your bank accounts .
What do landlords need to do now ? It is important to understand that in this new digital world they need to ensure their records and declarations are accurate and up-to-date . We can protect them in these turbulent times .