HMRC debating new tax regime for smaller BTL investors

HM Revenue & Customs has moved to launch a 12-week consultation on a scheme which it claims will improve the simplicity of tax demands levied on lesser-scale buy-to-let investors.

The new proposal, if agreed, will see buy-to-let landlords with an annual rental income of below £10,000 not required to keep their business records digitally. In addition, landlords falling into this category will not have to provide quarterly updates to HMRC.

However, they will still be obliged to utilise the so-called ‘optional cash basis.’

Alterations 

If the proposal receives approval, it is likely to be introduced in the Finance Bill 2017, for full implementation in 2018 or later.

Through its wide-ranging digitisation programme Making Tax Digital, HMRC had been banking on landlords to utilise specialist software in order to keep detailed business records. These would then be submitted quarterly.

The cash basis option will only be made available to simple property businesses. These include individual landlords and partnerships where partners are individuals.

This said, a statement from HMRC noted, ‘the option to use the cash basis will make budgeting for tax easier for landlords allowing them to better manage cashflows.’


Under the cash basis, buy-to-let landlords would only be permitted to declare their rental income for cash actually received. As part of the digital quarterly accounting scheme, they would be required to include the income that their tenants should have paid as income for the year-even if this rent had not been paid.

Less than 70 days for landlords to register and comply with new licencing legislation.

Landlords are reminded of the need to register with Rent Smart Wales

The law in Wales now requires private landlords to register themselves and their properties with Rent Smart Wales. The Housing Act (Wales) 2014 requires landlords to register and self-managing landlords who let and manage properties and agents to also undertake training and apply for a licence. Rent Smart Wales aims to drive up standards in the private rented sector. A specialist team deals with queries and helps landlords and agents register and apply for a licence.

The next campaign phase will lead to the 23rd November deadline and will inform landlords of their legal requirement to comply and tenants of their right to have a properly registered and licensed landlord or agent.

Rent Smart Wales is a landmark scheme that will drive up standards in the private rented sector by requiring managing landlords and agents to undertake training to ensure they understand their responsibilities.

It will help prevent the involvement of rogue, and even criminal, landlords and agents in the management and letting of properties. The scheme will help to protect tenants and will support good landlords and agents by helping them keep abreast of their responsibilities and legal obligations, raising the reputation of the sector.

The deadline for registration is now less than 70 days away and those who have not yet complied with the law are encouraged to discharge their legal responsibilities to register as soon as possible because registration when completed online, is a simple 15 minute process, but a licensing application can take up to 8 weeks to process. 

Avoid the hassle. YOUR AGENT lettings were amongst the first ten agents to be awarded an Agents Licence across the whole of Wales. So why not let YOUR AGENT be your agent?