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OK - why would this be an issue?
of course...more admin. and deadlines (and penalties!).
Seriously? You are happy for the Government to help themselves to your bank account? You see no issues with giving the numpties at HMRC or the Civil Service full access to your bank account? Let alone the additional requirement (with hefty financial penalties if you get it wrong) to report rental income monthly?
That is a LOT of trust you seem happy to place in the Government and the Civil Service. Personally, I think that the Government/Civil Service cannot be trusted with even the most basic of tasks and responsibilities. By and large they are, for want of a better word, morons.
However, I do accept that I may be at odds with the general consensus and I do have an almost pathological disrespect for authority so perhaps others feel differently to me.
Do any other landlords see this change as beneficial?
not keen on them having access to our bank account (although having been PAYE for 20 years I am used to the Govt taxing me at source) - however struggling to see the issue with monthly reporting......perhaps someone smarter can explain what the issues are there.
The issue with Monthly reporting is that there will be hefty fines if you miss any deadlines for filing and that it adds an extra and unnecessary administrative burden to Landlords.
As part of Making Tax Digital specialist software will be needed to file the monthly returns (something not currently needed) so smaller Landlords are likely to outsource this to their accountants which is an additional expense.
Paying tax monthly will also create issues for many Landlords. Because of the operational practicalities of letting property cashflow can sometimes be uncertain.
Rent receipts can be missed or delayed, maintenance bills tend to come in lump sums not spread out monthly, and rents can also come in lump sums (where tenants pay for six months upfront for example).
IF a landlord has been taxed on the year to date rental income on a monthly basis AND then a large maintenance expense is incurred the landlord might not have the “spare” income from the year to date rent to cover the expense (i.e. you will already have paid tax on a monthly “profit” that actually may not exist at the end of the year – okay, you might be due a refund from HMRC in this case but you will need to wait until the end of the year and then wait while your annual tax return is processed before getting the refund and plenty of people have gone bust waiting for a tax refund).
The Make Tax Digital program applies to all businesses as well. if LL's run their affairs professionally and as businesses then they are treated no different to a business.
Certainly will help them spot those that are cooking their books......especially with their new super computer - which is doing pretty well from what I hear from those that were involved with that project.
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
Yet more burocracy. Having to submit our income & expenses every month or quarter, digitally, at least quadrupling my admin. I assume there will be more fines if you're late with them. Will probably need to buy specific software.
As for deducting money on a regular basis from our bank account (or LA or booking portal) how much tax payers money will it cost to create systems that can deduct funds from us/our suppliers? How long will it take to debug it and who suffers in the meantime (many of us will have experienced the governments tech projects)? How do they decide how much to deduct every month/quarter? It can't be based on the tax one paid last year as costs (voids, refurbs, maintenance, arrears etc) and income (rent holidays/increases) vary year to year. Not to mention changes to portfolio sizes.
I think they're hoping that this survey will give them the justification to bring it in ie X% of LLs say they think it's a good idea.