The way you do your taxes is changing.
Say goodbye to piles of paperwork, the tax system is having a digital makeover.
Although changes to routines can be worrying, these alterations are being implemented to make life easier for businesses and self-employed individuals. The proposed scheme to completely digitise the tax system by the end of 2020 aims to make taxes more accurate, efficient and easier to manage.
As a landlord, you’ll need to be aware of these changes and how they affect you, in order to prepare for digital taxes becoming mandatory in April 2019. Here’s everything you need to know about making tax digital for landlords.
What is MTD?
Making Tax Digital, or MTD, is a government scheme to overhaul the tax system to make it completely digital by the end of 2020. This means that from April 2019, VAT tax records and VAT returns will be managed online.
Will MTD Affect Me?
Any VAT-registered business with a taxable turnover above the VAT threshold will have to make these changes.
So, if you are a landlord with an annual rental income of over £10,000, then the MTD changes will apply to you from April 2019. With UK rental prices rising, this is likely to affect most landlords in the UK.
The Making Tax Digital timeline commences on the 1st April 2019, when the changes will become mandatory for all customers, excluding a small number of customers with complex requirements which are being deferred until October 2019. (These types of customers include trusts, non-profits and public sector groups).
The new process will require self-employed individuals and landlords to:
- Use specific software or apps to keep track of their records
- Update HMRC every quarter through a new digital tax account
- Provide a full annual declaration at the end of each year
Further information can be found in the Finance Act, 2017.
The Income Tax Pilot Scheme
The government already has an income tax pilot scheme in place, which self-employed businesses or landlords can use voluntarily.
This scheme allows users to test out the MTD compatible software to store their digital records and send income tax updates to HMRC in place of filing a self assessment tax return.
Voluntary users can choose from a number of software options, sending a summary of income and expenses to HMRC every 3 months and sending a full report at the end of the year. You can even pay bills as you go and ask your accountant or bookkeeper to send the updates for you.
A Closer Look at the HMRC Making Tax Digital Scheme
Many landlords already choose to manage their taxes and accounts digitally through cloud based apps and software programmes.
Once the changes come in, these methods and software applications will need to follow new regulations. HMRC are not building their own software programme but will provide a list of approved software companies, some of which will be free of charge. You will still be able to use your current software system, as long as it complies with the new system.
Users will be required to communicate with HMRC via their Application Programming Interface (API) platform and submit VAT returns using information from these digital records.
This software should be able to calculate your return automatically- saving a whole lot of time and effort.
If you currently use spreadsheets to manage your taxes, it may be worth switching to a software solution now. Although spreadsheets are allowed if they comply with the new regulations, it might cost you more money to produce quarterly reports.
Your digital tax account will allow you to view and access all of your tax information in one handy place online. An agent services account grants accountants or other financial professionals you may employ access to relevant tax details.
Is the MTD Scheme Compulsory for Landlords?
Unless your annual income from your rental property and trade combined is under £10,000 or you are unable to partake in digital programmes due to disability or age, this change is compulsory.
It is expected that late fines will be implemented if you fail to file reports on time once the scheme is established.
MTD for Multiple Properties
If you are a landlord of multiple properties, you will only be required to provide income and expenditure for your investments as a whole.
However, it’s best to keep a record of individual properties to manage and assess the income of various rental properties you may own.
The Benefits of MTD for VAT
According to the latest edition of the tax gap report, there was a gap of around £33 billion in the last tax year! This clearly shows that something isn’t right and suggests that lots of people are making errors when it comes to submitting their records.
By digitising the way tax records are stored and reported to HMRC, the scheme hopes to make tax reporting far more accurate and easier for stakeholders to complete. Sending this information directly to HMRC online will hopefully minimise any mistakes that currently occur during the exchange of information.
For busy landlords who manage multiple properties, it can be hard to stay on track of receipts and invoices. Implementing a digital system which allows you to add information on the go via mobile applications will help prevent taxable claims from escaping.
The digital system will also allow you to see approximately how much tax you owe ‘as you go’ rather than waiting to find out at the end of the tax year.
By seeing all of your reports for individual properties in one place, it will be easier to manage your portfolio and determine which properties generate the best return.
Get Ready for Making Tax Digital with No Letting Go
To sum up, from the beginning of April 2019, landlords will be required to use MTD compatible software to manage their tax records, updating HMRC every 3 months and providing an annual declaration.
Although the end result aims to make managing taxes more efficient, there’s likely to be some teething problems at the start.
To prepare yourself for this shift, it’s best to start early. Make sure your current software is compatible, and if not, plan which system to use. Staying organised across the whole of your property management processes is key to ensuring a smooth transition.
No Letting Go provide professional, accurate property reports to help landlords and property professionals keep track of their investments.
To see the full range of reports we provide, browse the No Letting Go Services section on our website.
For landlords, there are seemingly endless responsibilities to keep track of. Every self-respecting landlord wants to provide safe and comfortable homes for their tenants, but it can be difficult to stay on top of changing developments.
One such responsibility that’s vital to stick to is getting an EPC for your property. The EPC is a certificate to ensure the sufficiency of a buildings energy performance and is required for all properties being put on the market to sell or rent.
We know it can be tricky navigating complex requirements and laws. That’s why we’ve put together this information on landlord EPC obligations.
So, without further ado, here’s everything you need to know about EPC for landlords, all in one place.
What is an Energy Performance Certificate?
Put simply, an Energy Performance Certificate (EPC) tells you how energy efficient a property is. Factors such as carbon dioxide emissions and heating costs are taken into consideration to give the property an EPC rating.
An EPC is required every time a property is put up for sale or rent.
Introduced in 2008 as part of the Home Information Packs (HIPs), the EPC aims to give potential buyers and tenants clearer information on the energy efficiency of their building.
As well as rating the building for its current efficiency, the EPC also gives suggestions for improving energy use and will provide a predicted rating for when these are implemented.
Energy Efficiency Rating
The energy efficiency of your property is given a rating between A and G, with A being very efficient and G being inefficient. An older property without double glazing or proper insulation is more likely to get a lower rating than a new build.
The property will also be given a number between 1-100. The higher the number, the more efficient the building is and the more cost-effective energy bills are.
The EPC will also provide estimated energy costs for heating, lighting and water bills. As well as advice on how to improve the energy efficiency of your property. From installing better quality wall insulation to something as simple as switching to energy efficient light bulbs, there are many ways to make your property greener.
What’s the Minimum Energy Efficiency Standard for Landlords?
As from April 2018, landlords in the private rented sector need a minimum rating of E for their rental properties. Failure to meet this standard could result in fines so must be avoided at all costs!
Tenants have the right to make improvements to the energy efficiency of the property, with the permission of the landlord.
From April 2020, these regulations will also apply to all ongoing assured tenancies in existence.
For more information on landlord requirements consult the government web page.
Which Properties Need an EPC?
Every domestic and commercial building in England and Wales must have an EPC. If you are leasing a property, you must have ordered the EPC before the property goes on the market.
The only types of buildings that are exempt include some listed buildings and residential buildings or rented holiday accommodation which are in use for less than four months a year. A room rented out by a residential landlord is also let off the hook.
The EPC must be shown to potential tenants and a copy supplied free of cost. Make sure you don’t get caught out!
How Long is the Energy Performance Certificate Valid for?
An EPC is valid for 10 years from when it’s completed. If the property holds an EPC from an existing tenancy, it’s fine as long as it’s within this period.
How to Get an EPC
As a responsible landlord, you must only use an accredited Domestic Energy Assessor when acquiring the EPC for your property.
To find a list of approved EPC organisations in the UK, check the energy performance certificate register.
What does the Energy Performance Certificate Cost?
An important question for landlords! Unfortunately, there is no fixed rate for EPC’s currently, however prices usually start at £35. Factors such as the size of the property, the type of property, how many bedrooms it has and its location are all taken into consideration.
Therefore EPC’s for larger homes in desirable locations are likely to cost more.
EPC’s and Feed in Tariffs
If your property has solar PV and you want to receive payments from the government’s feed in tariff (FIT) you will have to provide evidence of an acceptable EPC rating.
The Benefits of Having an EPC
It may sound like a bit of a hassle, but there are actually some benefits to getting a CPE for your property.
For one thing, having an EPC means you can feel safe in the knowledge that your property is within the required energy efficiency standards. That’s one less thing to worry about.
Another advantage, is that by periodically checking your property’s energy efficiency, it will be easier to save money on energy bills for your tenants. The EPC will also help you to plan for future costs with its breakdown of energy expenditures. For landlords managing multiple properties this will be particularly helpful.
Recent Changes to the EPC
From 1st April, 2019, the ‘no cost to the landlord’ exemption will no longer apply and landlords will be required to pay up to £3,500 on works to increase their property’s rating up to an E. If costs exceed this figure, landlords will be allowed to register for a ‘high cost’ exemption on the PRS Exemptions Register provided they give significant evidence.
This is a significant change that landlords in the private rental sector need to stay on top of.
Let us Lend a Hand
With all these obligations to wrap your head around, it’s worth delegating some tasks to make the process of organising a new tenancy that bit simpler.
No Letting go provide professional, unbiased inventory services to make the process as fuss-free and efficient as possible and help you stay on top of your responsibilities.
As a landlord, it’s your responsibility to provide a secure property for your tenants. No one wants to receive a call from a distressed renter who’s just been broken into. Safe and secure properties equal happy tenants.
Insufficient security against intruders is one of the most common hazards impacting well-being in the home. Burglaries and forced entry are not only alarming, but also result in a lot of hassle sorting out insurance claims.
So, how safe and secure is your property?
If you think there could be room for improvement, then read on.
Are the Locks Up to Scratch?
The first thing to think about when assessing the security of your property should be the standard of door locks in place.
Changing Locks Between Tenancies
It should be common practice to change all the locks on doors and windows for every change in occupancy. You never know who’s hands the keys of previous tenants can end up in, especially when getting new keys cut is so easy.
What Type of Lock to Choose?
The Residential Landlords Association advise using five lever mortice locks for external timber doors or a multi-point locking system for PVC doors.
It’s also worth fitting door chains onto front doors for added security.
Don’t Forget About Windows
Window locks are just as important as they are a common point of entry for intruders.
Ensure that all windows easily accessible from the outside have good quality locks. But note that locks should not be used for designated escape windows.
Are the Doors a Good Fit?
It’s all well and good having top-quality locks, but if external doors don’t fit the door frame properly your property is vulnerable to break ins.
Make sure that all exterior doors and garage doors are correctly fitted and are free from damage.
What About an Alarm System?
Fitting a security alarm is another way of keeping your property safe for your tenants. Raising the alarm is especially important if the occupants are away from the property for extended periods of time.
The security system doesn’t have to be state-of-the-art. A simple home security system is all you need to protect your property. There is a huge array of burglar alarms and defender alarms out there:
- The simplest option is a ‘bells-only’ alarm which, when triggered, sets off an audible alarm to alert tenants or neighbours
- A speed dialler alarm allows you to choose up to three contact numbers to be immediately contacted by text message when the alarm is set off
- The most expensive alarm is a monitored system. When the alarm is sounded, a signal is sent to a remote monitoring centre. This means the centre can confirm whether there is a security issue, and if so, inform the police, freeing up more of your time
Is Your Property Visible?
If your property is located slightly off the beaten track or in an area without many neighbours around, it might be worth investing in a security camera.
CCTV systems are more affordable than they used to be, but make sure you comply with laws on the handling of digital images.
Is Your Property Well Lit?
A simple, yet effective security measure is to fit security lights. Outdoor lighting is essential for making your tenants feel safe when they return to the property late at night.
Important places to illuminate with sensor activated lights include the property entrance, gates, driveways and anywhere that could be a potential entry point for intruders.
It’s also worth fitting wall switch controlled lights near garden outbuildings, side and rear doors. Anywhere not overlooked by neighbours could benefit from additional lighting.
How Safe is the Area?
The location of your property can have a big impact on the risk of break ins. Ensure you research the area thoroughly before making the decision to buy new properties.
This type of research can take time. Time that busy landlords with multiple properties might not have to spare. Luckily, there are several property report services available to do the hard work for you. These reports look at factors such as historical crime data in the area as well as comparing local and national crime rates. They can also give you information on the nearest police stations to make property management simpler.
Do you Have a Vacant Property?
It’s important to keep tabs on any vacant properties you might have. Most insurance companies require vacant properties to be visited regularly to check the property is secure and manage any issues.
If you’re juggling multiple properties, why not delegate this task to a professional service? No Letting Go offers reliable vacant tenancy inspections so you don’t have to worry about any attempted break-ins.
Are Your Tenants Safety Aware?
It could be worth sending your tenants a quick email with advice to ensure they’re up to date with the latest safety information. If you’re renting to students or younger people this could be particularly beneficial.
It’s a nice way to show you care and are serious about your responsibilities as a landlord. Simple home security ideas and tips such as hiding valuables and leaving a light on in the bathroom when out could make all the difference.
Direct your tenants to the Met Police website for further home security information.
Secure Property Management
Hopefully, these security ideas will help you to provide the safest and securest properties for your tenants.
If you’ve already got a lot on your plate, let us help with our professional, unbiased inventory services and property reports. With No Letting Go’s assistance, you can rest assured your property meets all the safety standards.