20th
Nov 2015
A firm of chartered accountants’ latest research claims that landlords are holding back on maintenance and repairs over the next few months. They are doing so until April, where they can make the best of the government’s new wear and tear tax allowance.
The firm says that under the new tax regime, landlords can now only claim the allowance upon supplying the necessary receipts for the work carried out.
The survey was held online with PRS landlords and figures state that 31% have no intention of spending more than £250 on furniture and fixture maintenance in this tax year.
Over the last few tax years, 86% of landlords said that on average they had spent more than £250 per year and one in seven stated that they had regularly spent over £1,000 per year.
Landlords who plan just to spend the least on maintenance issue, under £250 – has doubled compared to the last few years.
The present wear and tax allowance that most landlords claim for when renting out ‘homes’ is paid irrespective of whether they have carried out any maintenance work. As widely reported, from April next year landlords will only be able claim back on actual replacements of furniture, fixtures, fittings and maintenance work carried out, together with the receipts.
Tim Walford-Fitzgerald, tax principal of the firm, said: “The new system is intended to be fairer and transparent, only giving landlords tax relief for the money they really pay out. But the impending change has thrown up an anomaly – landlords can spend nothing on maintenance this year and still claim 10 per cent tax relief on their rental income. And they could save more tax on what they do spend if they delay doing so until after April”.
News Archive »