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Landord Emergancy Cover

UltraSoul
UltraSoul Posts: 22
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edited 31 May 2021 at 4:58PM in House buying, renting & selling
Im moving into a propety with my partner and i am going to rent out my property. I'm looking at landlord cover for emergancy repairs, (such as British gas Homecare4 £18 per month) From what i understand I can claim this money back as an allowable expense. Are these packages worth it for the peace of mind?  I like the idea that the boiler would be covered and repairs to it. And the tennant can have a emergancy number to call if there is a problem. But for some reason a shower isn't included.   My question is, if something like this can be claimed back from the tax, why wouldn't landlords do this as a standard for their properties?
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  • anselld
    anselld Posts: 8,262
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    edited 31 May 2021 at 4:02PM
    I know a Landlord who had BG Homecare.  When the boiler broke down just before Christmas, no hot water or heating, the earliest appointment was 10 days later.  He got a local plumber in the next day and subsequently sacked off BG for failing in his hour of need.  Perhaps a one-off glitch but who knows.

    Regarding tax you realise being tax deductible doesn't make it free, right?
  • UltraSoul
    UltraSoul Posts: 22
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    Yes i know its not free. I'll still have to pay for it. I will have to pay 20% tax. But by claiming it back through allowable expenses, would reduce how much tax i have to pay because i'll be paying for this service.

    For example if i have to pay £2000 income tax. By claiming £200 British gas homecare back for allowable expenses reduces the tax bill to £1800 and my tennents could benefit from a emergancy repair service if they need it.

    If thats not right please let me know, I've never rented out a property before.
    I could self insure, but i don't kow a reliable emergancy contractors which i would have to find unless i find a management service.

    I was thinking of going down the route of using OpenRent to get the tennants in and signed up, and British gas homecare for emergancy repairs if needed.
  • Hasbeen
    Hasbeen Posts: 4,404
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    edited 31 May 2021 at 5:13PM
    It is an allowable expense that if you go over, I believe?  £1000 per year which is taken into consideration on your self assessment, in expenses you can claim some tax relief back on your homecare?

    Are you going to be over £1000 per year in allowable expenses?
    Probably, when you pay to register as landlord.
    Have linked heat, smoke detectors, carbon monoxide detectors, installed
    Have up to date Electrical/ Gas safety/ EHIC reports.
    Landlords insurance.
    Boiler cover.
    Etc Etc 

    And then legal costs when rent is perhaps not paid and your property is damaged.  :'(

    Your BG homecare would cost £216 per year if claiming it would save you about £43 not £200. 

    Before rushing into becoming a Landlord? Read up on helpful advice as per here: 
    Tenancies in Eng/Wales: Guides for landlords and tenants — MoneySavingExpert Forum
    The world is not ruined by the wickedness of the wicked, but by the weakness of the good. Napoleon
  • anselld
    anselld Posts: 8,262
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    edited 31 May 2021 at 5:10PM
    UltraSoul said:
    For example if i have to pay £2000 income tax. By claiming £200 British gas homecare back for allowable expenses reduces the tax bill to £1800 ...  If thats not right please let me know, I've never rented out a property before.
    That is incorrect.  Forget the idea of "claiming it back through expenses", that isnt how it works.
    If you were to pay £2000 income tax as a basic rate tax payer it would imply a profit of £10,000.
    A £200 allowable expense would reduce your profit to £9,800
    Your tax bill would still be £1960.
    You only "save" the tax on the expense, ie 20% of the £200 equals £40.
  • UltraSoul
    UltraSoul Posts: 22
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    Hasbeen Thanks I just found that page.
    anselld Thank you, that makes more sense, claiming the tax back on the service, not the service itself.
  • Grumpy_chap
    Grumpy_chap Posts: 14,740
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    UltraSoul said:
    My question is, if something like this can be claimed back from the tax, why wouldn't landlords do this as a standard for their properties?
    Some LL's have the property on a fully managed service with a local Lettings Agent and the LA takes any calls and has a network of local tradespeople that can respond to anything quickly.

    Some landlord insurance policies offer an "emergency" service as part of the LL insurance, so making a separate product such as BG Homecare redundant.  Though, of course, the LL insurance add-on cover is only really the same thing.

    What service level do BG Homecare offer?

    You need to remember that good tenants can also be demanding tenants and expect any issues in their rented property to be resolved fully and satisfactorily far quicker than an individual might accept when in their owner-occupied home.  As an example, my tenant notified that there is a fault with the fridge freezer on Thursday evening - by Saturday lunchtime they had their choice of replacement fridge freezer installed and the old one taken away.
  • AdrianC
    AdrianC Posts: 42,189
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    anselld said:
    I know a Landlord who had BG Homecare.  When the boiler broke down just before Christmas, no hot water or heating, the earliest appointment was 10 days later.  He got a local plumber in the next day and subsequently sacked off BG for failing in his hour of need.  Perhaps a one-off glitch but who knows.
    Apart from that, BG's usual response on any boiler that's not in the first flush of youth is "It's knackered, mate, can't get the parts. You'll need a new one... <sucks teeth> 3x usual price."
  • UltraSoul
    UltraSoul Posts: 22
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    I'm planning on letting the property out unfurnushed. BG are offering a Homecare4 so all the gas, drains and electrics. I was going to do the viewings myself while using OpenRent to do all the checks.
    I also looked into doing the local authority gauranteed rent scheme, but it seems to be quite a bit lower the the rental value.
  • Grumpy_chap
    Grumpy_chap Posts: 14,740
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    UltraSoul said:
    I'm planning on letting the property out unfurnushed. BG are offering a Homecare4 so all the gas, drains and electrics. I was going to do the viewings myself while using OpenRent to do all the checks.
    I also looked into doing the local authority gauranteed rent scheme, but it seems to be quite a bit lower the the rental value.
    If you are going to self-manage, are you fully up to speed with all the rules?  
    Letting unfurnished normally means that white goods are provided.
    As a LL, you need to have a sufficient fund available to simply sort any issues that arise.
  • Slithery
    Slithery Posts: 6,046
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    UltraSoul said:
    I also looked into doing the local authority gauranteed rent scheme, but it seems to be quite a bit lower the the rental value.
    If you have a BtL mortgage you're probably only allowed to let out the property under an AST. Business to business letting is usually prohibited.
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