BTL should attract VAT

Loopgames

Vat registeration doesnt make one a 'proper' business...only an unpaid tax collector:D

Loopgames

FTBFun wrote: »

Tesco's aren't a proper business either then, as they don't charge VAT on their food.

They do charge vat...its charged at nil rate for basic food.

theartfullodger

VAT ain;t the issue, I suggest.

What about all the tax relief evil & wicked landlords get on the interest payments on their mortgages?? And any other "legitimate expenses" they can wangle??? And this tax relief means the rest of the tax-payers end up paying more tax....

And decent Daily-Mail reading residential home-owners aren't allowed tax relief for their mortgage payments!!!

Cheers!

Artful (evil landlord..)

Graham_Devon

FTBFun wrote: »

Tesco's aren't a proper business either then, as they don't charge VAT on their food.

And you work in finance!?

socrates

Graham_Devon wrote: »

Well to be fair, you are probably exactly the person he is describing, so I guess no love lost there!

He is talking about accidental LL's - and chancers

In fact he has married into the BTL game - so it is he that is the accidental LL not me

Perhaps he is jealous of the wealth created by his wifes family and the fact that he relies on it

You say he is not in the business to make a profit - he sounds like a really good businessman

Anyway thanks for your input

Thrugelmir

antrobus wrote: »

If you wanted to wash out those kind of 'amateurs' the easiest thing to do would be to change the law so that interest paid was no longer an allowable expense for tax purposes.

So much gets said about this. In reality this makes little difference. As applies to all business lending. When HPI was compounding at over 7% per annum. No-one cared about profit on renting the real money was being made in Capital Gain. Successful business pays tax that's a fact. With no after tax profit. There's no cash generated to repay the capital owed on the mortgage.

Why were there only 30,000 "BTL" mortgages in place prior to 1998? That's the question that needs to be answered. Commercial lending only attracted an additional 1%-1.5% loading. Yet "BTL" was the preserve of the Capital rich. In the main investment was made in flats and HMO's in University towns.

JasonLVC

VAT is exempt,meaning it does not come under the VAt regime.

Assuming VAT was applicable, then it would mean buying/selling a home would be VATable (ie,20% more). As buying or selling a house would likely be valued over the £77k threshold for VAT registration, anyone who bought or sold a house - whether in business or not, would then be caught in the VAT regime. Which would be ridiculous.

VAT would also then apply to any rent the landlord charges, so all tenants - social or private, end up paying 20% on top of the rent. There is an obvious reason why VAT is exempt on housing rent!

Of course, the landlord gains massively, he can reclaim any VAT back he incurs on repairs, estate agent costs and when buying a home, when he comes to sell it, VAT will also be charged so 20% more expensive unless sold to another landlord - so it becomes a circular market, keeping private individuals out or private buyer could buy house but then unable to reclaim that VAT on their house.

The landlord comparing to a van purchase clearly understands nothing about VAT other than I suspect he feels unhappy that a normal business can reclaim VAT on everything and he can't, hence his solution is to tax everyone except himself.

There are specific sales which are VAT exempt. Healthcare, education, burials, housing rent, banks, insurance, charities. None of the sectors can reclaim VAT back but they still incur it.

All sectors of business have chancers, hot dog sellers undercutting McDonalds, coffe booths undercutting Starbucks, street markets undercut retail shops, people selling widgets on ebay or amazon. Destroying competition to suit "the big professionals" just smacks of lazy profit making. If margins are too low in BTL, then they're either doing it wrong, wrong area, wrong product or just wanting too much margin (ie, greedy).

...but lets get European wide approval to change rent VAT rules across 27 EU member states for a few landlords in the UK who want to make another 2% profit.

ess0two

Graham_Devon wrote: »

Was talking to my cousin, who is a landlord (much older than myself too with family wealth which unfortunately is through marriage, not our side!) and he suggested BTL should attract VAT.

His main reason for saying this is that it would wash out the amateurs, of which he is sick of.

He suggested that if you buy a van for to sell ice creams from, it attracts VAT. If you buy a tractor to turn the fields, it attracts VAT. If you buy enclosures for cows, it attracts VAT. If you buy a web prescence for your online business, it all attracts VAT.

Therefore, why shouldn't BTL attract VAT?

Now, to be fair, he's been in this game for years and it's a family thing not something he actively tried to get into. He's not buying up houses to rent out, they have been in the family for years and he's not your average landlord trying to make a profit...these houses will be passed down to the next generation and so on. Infact he doesn't own them at all, it's his wifes side that does.

But he's sick of the bad press he now gets due to what he classes as chancers. He also feels for the tenants in these scenarios.

So, I don't know the in's and out's. He I presume knows more than myself. Should BTL attract VAT? Would that be a way of regulating the FTB vs BTL war?

Sounds like he's attempting to line his own pockets further,bad press? tell him drop his rent prices if he dont want to feel bad.

Loughton_Monkey

VAT on rents is the best idea I've heard all year.

Untold extra tax revenue of 20% on all rents would be a wonderful boost to revenue to get rid of the deficit quicker.

For housing benefit, though, the benefit should exclude the VAT, forcing the claimant to cut back on X-boxes, I-phones, and BIngo in order to pay for it.

Pips are already squeaking for a lot of tenants - especially those not on benefits. A further hike of 20% all of a sudden is just the trigger they need to get off their back sides and invest in their own property.

After that, tuition fees could do with the same treatment, and to even things up, how about VAT on the loan interest as well?

The world is our lobster. Prescription charges? Nursing Home Charges? Full VAT on energy costs? Betting, Bingo, Road Tolls, Postage, Stamp Duty, IFA Fees, Food.....

Come on, George. Austerity is fun. Let's go!

cotleigh

I don't see how charging 20% tax on rents would make things better for most tenants?

This is a silly idea.