BUY TO LET LANDLORDS - ACTION REQUIRED

Buy-to-let landlords need to start considering their options, in particular, those who have borrowed heavily in order to build their property portfolio.

As we have mentioned previously in this newsletter, from April 2017 deductions for finance charges will be progressively reduced and replaced by a 20% tax credit. This will promote a number of landlords into the higher rates of Income Tax and increase most buy-to-let landlords’ tax bills where annual finance charges are significant.

Consider Jane. She has purchased a number of buy-to-let properties and her total rental income is £120,000 a year. Her expenses, excluding mortgage and loan interest are £15,000 and her mortgage interest £85,000. Jane has no other income. Her Income Tax bill for 2016-17, based on these figures, is estimated to be £1,800 leaving her with disposable income from her property business of £18,200.

With no changes in her rents and expenses her Income Tax bill will gradually increase until 2020-21 (when the changes to tax relief on finance charges are fully implemented). Her tax bill for 2020-21 will increase to £13,500, leaving Jane with a much reduced disposable income of £6,500.

Landlords affected need to start to consider their options now. There are a number of practical changes that could be made. For example, Jane could:

• increase rents,
• introduce savings to repay loans and therefore reduce interest charges,
• dispose of properties that are not pregnant with capital gains.

If you have borrowed heavily in order to build your buy-to-let business, better to consider your options now than to be forced into less effective restructuring as the transitional period progresses.

WORKPLACE SEMINAR - AUTOMATIC ENROLMENT SEMINAR

Registration and refreshments from 8.30am – Seminar starts at 9.00am

Oswestry Cricket Club, Morda Road, Oswestry, Shropshire, SY11 2AY

Under the Pensions Act 2008 every employer must automatically enrol all employees who meet certain criteria and contribute towards this. You must be ready to start enrolling staff from your staging date. The Pensions Regulator will have already advised you of your staging date which is set in law and is the date your automatic duties as an employer come into effect for you. Preparation is the key, the Pensions Regulator suggest that you need at least a year to prepare for automatic enrolment, so you need to make sure you start making plans in good time.

Many employers are under the impression that Automatic Enrolment will not affect them as they do not employ enough staff. Automatic Enrolment is not dependent on employee numbers even if you employ just one person you must provide a workplace pension.

Automatic Enrolment is the employers’ responsibility and cannot be ignored. Failure to comply with your duties as an employer may result in you being fined and/or prosecuted.

This seminar, presented by D&G Independent Limited, is designed to help you prepare your payroll procedures for Automatic Enrolment and explain what you will need to do to comply with the regulations.

• Automatic Enrolment – what it is and where you can get help
• What is your staging date
• Fines for non-compliance
• Which employees are eligible
• What are the costs for the employer
• What are the employer’s responsibilities
• Choosing a pension scheme
• What you will need to do to get ready
• Question and answer session

The seminar will last approximately 1 hour and is FREE. There will be an opportunity for questions at the end.


To reserve your place:

Contact:
Telephone: 01691 654545 Fax: 01691 679449
Email: partners@morriscook.co.uk

Register on Eventbrite:
https://www.eventbrite.co.uk/e/automatic-enrolment-workplace-pensions-seminar-tickets-26466902217?aff=es2