BTL should attract VAT

chewmylegoff

Graham_Devon wrote: »

If he was as greedy as you want to make out, surely he would be snapping up further properties, and therefore subject to his own thoughts? Greed, by defintion, is to have more. As I said, an easy put down, but not thought through.

Honestly, it was just a 2 min (if that) convo as part of a general conversation, as my sister is having landlord problems.

He's not greedy, he's not even wealthy, though not poor. Just married into excessive family wealth which can neve really be tapped into.

i didn't say he was greedy. but he does seem to want barriers to entry to be placed on the business that he is in so that fewer people can enter the marketplace due to the increased cost of doing business, an increased cost that he would never have to pay himself.

Graham_Devon

chewmylegoff wrote: »

i didn't say he was greedy. but he does seem to want barriers to entry to be placed on the business that he is in so that fewer people can enter the marketplace due to the increased cost of doing business, an increased cost that he would never have to pay himself.

The point isn't really the VAT. I made it that as it was a quick off the cuff suggestion to make it less viable for any man and his dog to leverage themselves up to the eyeballs and become a landlord. As I said, the convo revolved around my sisters landlord issues, and he mentioned he was sick of good landlords names being dragged through the mud due to chancers. I don't think that's a particularly outrageous comment....you only have to look at the buying and renting forum to see the mass of issues.

That's not many business's with such low levels of regulation you could do that with.

He's not trying to be greedy as people are making out. As I said, if he was trying to be greedy, he could, and he could buy up houses, but hasn't and isn't.

I should think twice before bringing issues to this particular forum as it always seems to end up in these "your thick, well done you" and loads of assumptions about anyone who goes against the grain.

chewmylegoff

Sorry graham. It is a wonderful, well thought through, clever idea. Well done to you and your cousin for coming up with it. Hopefully the government will pick up on it and implement it immediately. ((((((((((Hugz))))))))))

cotleigh

They are never going to insist that landlords charge VAT on residential rents. To do so would be political suicide.

JasonLVC

Graham_Devon wrote: »

....As I said, the convo revolved around my sisters landlord issues, and he mentioned he was sick of good landlords names being dragged through the mud due to chancers. I don't think that's a particularly outrageous comment....you only have to look at the buying and renting forum to see the mass of issues.

That's not many business's with such low levels of regulation you could do that with.

If the conversation is about how to improve the image of landlords and get rid of the bad image they have then the simplest thing would be to introduce regulation, as chewmylegoff noted earlier, a license fee similar to taxi drivers could work.

Minimum standards, properties inspected have to hit a certain level of offering and only then are you issued with a license to operate as a landlord. There will still be chancers but they can have their license revoked or be forced to comply with whatever they've failed to comply with.

Much simpler than VAT (I realise the VAT was just an idea/concept not a real suggestion), the local authority can charge a nice fee for it and tenants get a guaranteed minimum standard of quality - not just the property but also in dealing with the landlord such as deposits, interactions with the agent, etc.

Yes, that'll be a cost to the landlord and having to maintain thie properties will focus those who want to take the job seriously whislt the dodgy chancers fall away.

undetterred

The original conversation never probably occured.

JasonLVC

undetterred wrote: »

The original conversation never probably occured.

Why does that matter? Nothing wrong with a bit of spit-balling.

Eellogofusciouhipoppokunu

Graham_Devon wrote: »

Thing I don't get is that I'm self employed. I'm not VAT registered due to being under the threshold.

Are you self employed as a partnership/sole trader or self employed within a limited company framework?

If you are within a limited company you can chose to register for VAT even if you are under the limit. You will then charge your clients VAT for your products and services and get VAT refunded from your own purchases. If you are a selling a service rather than a product then you could register for the Flat Rate VAT scheme. This is where you charge 20% to your customers for your services and you pay a proportion of it to the Inland Revenue and pocket the rest.

You get a 1% discount in the first year of being registered as an incentive. The VAT proportion you pay to the Inland Revenue depends on how your business is registered. Advertising pays 11% and Accounting or book keeping pay 14.5%, for example. The details are in this link.

http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#2

Eellogofusciouhipoppokunu

Graham_Devon wrote: »

Or providing more, as less landlords take them on due to increased accounting? It becomes a proper business, not just an investment if you see what I mean.

I think all it would end up doing is giving yet another tax incentive to BTL chancers and further pricing out FTBers. If you wanted BTL to be run as a proper business then you could insist on a Ltd company framework, but that would allow the BTL landlords to just go bust and walk away from their responsibilities. The lenders won't go with that. Besides, there are a lot of good tax dodges within a limited company framework so once again you'd just be gifting tax incentives to BTL landlords and making the whole thing more appealing.