The first week in April can be a confusing time for businesses – for two important reasons.
Firstly, it marks the beginning of the new financial (1 April) and fiscal (6 April) years. Awareness of these dates is crucial as it is with reference to these that Governments tend to institute tax changes – and this year will be no exception.
We already know, courtesy of George Osborne’s infamous second Budget Statement of 2015, that 6 April will see the withdrawal of the 10 per cent wear and tear allowance, replacing it with a relief for replacements of furnishings.
Further, the Chancellor laid out the final details of his SLDT changes in last week’s Budget. The three per cent SDLT levy for purchasers of ‘additional properties’ will be introduced on 1 April 2016, and you can read more about the policy details here. The Scottish Government is following step and has passed legislation to introduce a similar levy for additional properties on their Land & Building Transaction Tax, also commencing in April.
For those of you with employees it is also worth noting that 1 April sees the introduction of the ‘National Living Wage’, whereby over-25s must be paid at least £7.20 per hour.
It’s the Law!
However, it is not just for tax purposes that April is an important month. Governments also use April for the start of legislation which will have an impact on businesses, and significant changes to existing regulation or arrangements.
As such there are a couple of changes which landlords need to be aware of:
- ‘Right-to-Request’. From 1 April tenants will have the right to request permission to improve the energy efficiency of their homes where government support is available to help pay for them. Landlords must not “unreasonably” refuse permission to a legitimate request, but the improvements must be funded at no upfront or net cost to the landlord.
- Specific to landlords, and in particular those housing tenants in receipt of LHA, the Government also uses 1 April to introduce the new year’s Local Housing Allowance (LHA) rate, details of which are available here.
Finally, and just to be awkward (and to ruin the April fools theme), from today (21st March) BTL mortgage providers lending to ‘accidental landlords’ have to be regulated. The implementation of the EU Mortgage Credit Directive creates a distinction between ‘consumer’ and ‘business’ BTL mortgages.
Applicants without a track-record of letting property, who apply for a loan against a former home, inherited property or otherwise ‘unplanned’ purchase will be restricted to ‘consumer BTL’ products which will be subject to greater restrictions and controls.
Although, as consumer products they will also provide access to consumer protections similar to those currently available to residential mortgagors – such as taking a complaint to the Financial Ombudsman. You can read all about it here.
There are quite a few more changes coming up this year, such as a complete reform of tenancies in Scotland and Wales, criminalisation of landlords who fail right-to-rent regulations, and a new, faster abandonment repossession procedure.
So, to be continued…