Loading Guild Resources
Loading Guild Resources
Loading Guild Resources
Time to look at the latest measures coming out of Westminster that will impact landlords' finances and holiday lettings.
The cost of evicting tenants has become more costly as the Ministry of Justice admits current fees only cover less than half the cost of running the courts and tribunals services.
More worrying are new powers for HM Revenue & Customs to snoop on landlord finances. One consultation measure will allow HMRC to trawl holiday letting portals for undeclared rent.
While a severe privacy infringement has hit the statute books almost unnoticed. The new law allows HMRC to demand financial details about landlord accounts from banks and building societies without telling the account holder.
The Courts and Tribunals Service (HMCTS) want the people who use the courts for civil cases to shoulder a larger share of the service's costs. HMCTS will offer financial help to people on low incomes or who cannot afford the fees – but this is unlikely to include landlords.
The idea that went out to consultation earlier this year was that court and tribunal fees would benefit from an inflation-linked increase dating back to 2016, when the last hike took place. For example, the cost of issuing a warrant of possession has risen from £121 to £131.
"Our courts and tribunals service operates on the principle that those who use courts or tribunals outside the criminal jurisdiction should pay towards the cost of the service they use. Our Help with Fees (HwF) remissions scheme is in place for those in receipt of certain benefits or on a lower income and cannot afford fees," says the consultation response.
"Additionally, there are some court and tribunal services for which we charge fees set below the cost of the service, or where we do not charge a fee at all."
HM Revenue & Customs wants permission to snoop on landlords letting holiday homes and buy-to-lets through online platforms. A new consultation reveals the taxman is concerned that landlords working through platforms like Airbnb are failing to declare their incomes.
The power play demands digital platforms should keep financial information about users booking holiday homes for at least five years and make the data available to HMRC.
HMRC will cross-check the data with tax returns to ensure landlords declare their incomes correctly. The measure will also cover freelances, retailers, restaurants and taxi firms taking online sales.
MPs may have pored over the details of the new Finance Act 2021 but overlooked a clause that seriously erodes financial privacy for landlords. Section 129 of the Act allows the Treasury to make rules considered 'appropriate' to align UK standards with model rules devised by the think-tank Organisation for Economic Co-Operation and Development (OECD).
Under these rules, HMRC can check landlord bank and building society accounts without permission. HMRC has had a similar power for some time but has had to ask the account holder's permission to access the data until now.
"The growth of the digital economy also creates challenges of compliance and tax collection for HMRC and other tax authorities. To address these challenges, the OECD has developed rules for digital platforms to report the income of individuals or companies selling goods or providing services via their platform to the tax authority where the platform is resident, incorporated or managed," says the consultation document.
"This information is sent to the tax authority where the seller is resident. The platforms will also be required to provide a copy of the information to the seller, which will help the seller declare the correct amounts for tax purposes."
HMRC says the measure will speed up responses to requests from overseas tax authorities about gig economy activity in the UK. Professional accountants disagree.
"International obligations are no excuse for sweeping away established self-assessment safeguards and enabling HMRC to obtain information on taxpayers from financial institutions without prior approval," said a spokesman for trade body the Institute of Chartered Accountants of England and Wales (ICAEW).
A cross-party lobby group is pressuring Housing Secretary Robert Jenrick to amend the tenant fee ban to allow landlords to make charges for pets. Led by Tory Andrew Rosindell, the group wants Jenrick to let landlords charge for insurance to pay for pet damage or an additional security deposit if a tenant wants to keep animals. The fee ban outlaws such charges at present.