Landlords Corner – What Will Renters Reform Bill Mean For Landlords?
As a landlord in London, it is essential to stay informed about the ever-evolving legislation that affects the rental market. The forthcoming Renters Reform Bill is set to bring significant changes to the landscape, with proposals such as the abolition of Section 21 evictions.
At Trading Places, we understand the importance of keeping our clients updated with these crucial developments. With our deep industry expertise and commitment to providing comprehensive support, we ensure that landlords and letting agents in London are fully informed about the Renters Reform Bill, allowing them to navigate the changing regulatory environment confidently and safely.
The Renters Reform Bill is expected to include the following provisions:
· Abolition of Section 21 evictions.
· Introduction of a Decent Homes Standard for the Private Rented Sector (PRS).
· Establishment of a Government-appointed Ombudsman.
· Restrictions on landlords' ability to increase rents more than once a year.
Landlords could face fresh tax challenges
The Renters Reform Bill proposes the creation of a new landlord database, which could provide valuable information to HMRC (Her Majesty's Revenue and Customs) for pursuing landlords who have unpaid taxes. However, whether the Bill guarantees HMRC full access to all information submitted during the registration process is still being determined. BDO, an accountancy and business advisory firm, warns that HMRC will likely use any publicly accessible landlord data for compliance activities based on its current access to the Register of Overseas Entities.
HMRC ensures that landlords declare their rental profits and pay the appropriate taxes. It encourages landlords who have made mistakes to correct their position voluntarily through initiatives such as the Let Property Campaign or other disclosure processes offered by HMRC's Digital Disclosure Service.
The Land Registry's implementation of new information requirements under the Levelling Up and Regeneration Bill will provide additional property data, which HMRC will combine with existing sources such as the Land Registry's records, the Register of Overseas Entities, and HMRC's Connect database. This extensive data analysis will enable HMRC to identify cases for investigation and potentially levy taxes, late payment interest, and tax-geared penalties.
Dawn Register, head of tax dispute resolution at BDO, says: “HMRC already holds significant information on taxpayers’ financial affairs. The introduction of a new private rented sector database will leave few places to hide for landlords who don’t comply. Any landlords who don’t currently pay the right amount of tax would be well advised to bring their UK tax affairs up to date before the register is introduced. In addition to providing peace of mind, making an unprompted disclosure should lead to lower tax-geared penalties for errors, compared to rectifying mistakes after HMRC gets in contact. It will also help to mitigate late payment interest - which is currently at a 14-year high of 6.75 per cent per annum and due to rise to 7.0 per cent from May 31.”
Will inventory checks change?
The chair of the Association of Independent Inventory Clerks, Daniel Evans, is calling for the bill to impose independent inventory checks in all rental property agreements. Daniel Evans says:” Inventory companies have the capability of being the only truly independent agencies operating throughout the lettings process. It is clear the Government wants to ‘professionalise’ the private rental sector and this is an obvious place to start. Ministers should take this opportunity to include a clause which makes independent inventory mandatory. Then, in the event of a dispute, the inventory will be valuable evidence to offer to the deposit protection scheme provider. But if this process is going to have credibility for the tenant as well as the landlord, that inventory must be curated by an independent agency. This increase in transparency is not just about tenants. Landlords, too, can benefit from utilising the services of a professional independent inventory clerk to improve the service for everyone.”
No matter what happens with the Renters Reform Bill, rest assured Trading Places is on hand to ensure you know everything you need to manage your letting property.
We are always here to help
Many landlords struggle with paperwork, and staying on top of legislation, but we are here to assist you, ensuring your tenants receive everything they need in your rental property. if you are looking for guidance on the Leytonstone rental market, or you just want a helping hand in complying with rental market regulations, we are always here to assist you.
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