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Is Being A Landlord All About Tax?

Is Being A Landlord All About Tax?

The answer is obviously, no - tax is periphery and everyone pays it, so while you should take care to only pay what is due and not overpay, happy tenants, safe houses and stable finances are more important.

If only it were that easy though. Britain's 'tax code' which defines which taxes are due, runs to 17,000 pages - the longest in the world  (the average bible is 1,200 pages, Lord of The Rings (all 3 books) is about the same). So in a way, it is not surprising the average landlord seems to spend far too much of their time trying to work out how much tax they need to pay. It also explains why there are 200,000 working accountants in this country - just think of all the useful things 200,000 people could do if they were not wasting their working lives worrying about other peoples taxes...

There follows a summary of current tax changes from the Federation of Small Businesses, a link to one of HMRC's webinars (which are well worth attending as the 'onscreen chat' gets you answers to specific questions far quicker than their telephone helpline) and a reminder of our forthcoming PDPLA tax education sessions running through May and June - do make sure you book your place.

Summary of Changes (from the FSB)

The Personal Allowance, the amount you can earn before paying Income Tax, has increased to £12,500 p.a. (from £11,850 p.a.). This will mean a small reduction in tax of £130 a year for most people. The threshold for paying the Higher Rate of income tax (40%) has also increased to £50,000 (from £46,350). This amount includes the increased Personal Allowance.

There is no change to dividend tax rates in the 2019/20 tax year. The tax-free dividend allowance is £2,000, Basic-rate taxpayers pay 7.5% on dividends, Higher-rate taxpayers pay 32.5% on dividends, and Additional-rate taxpayers pay 38.1% on dividends.

If you are a company Director it is clear that, with a little bit of planning, there are some real opportunities to keep your income tax and National Insurance contributions under control. For example, paying yourself a salary of £8,632 (the secondary threshold for National Insurance contributions has increased £8,424 to £8,632) would be very efficient as you"ll pay employer NICs of 13.8 per cent on annual salary payments above this threshold.

Then paying yourself in dividends of up to £41,368, making a total of £50,000, would also be efficient as you would only pay tax on these dividends at 7.5% and no NI. We"ll leave you to work out just how efficient such an approach would be.

Scottish tax rates are slightly different with the basic rate being between 19 and 21%, the higher rate being 41% and the additional rate being 46%.

The Dividend Allowance for the 2019/20 tax year remains at £2,000. However, as outlined above the increased tax thresholds mean that you can take more in dividends before paying the higher dividend tax rate.

Whilst not strictly a tax year change, National Minimum Wage and 'National Living Wage" amounts increased from 1 April 2019. The minimum hourly rate that your staff are entitled to depends on their age and whether they are an apprentice, as below.


25 years +

21 to 24 years

18 to 20 years

Under 18 years








1 April 2019







From 6 April 2019, benefit in kind (BiK) tax rates have increased for company cars. The percentage applied to the list price of the car has increased based on the CO2 emissions published by the Vehicle Certification Agency. HMRC has published an on-line ready reckoner you can use to calculate your company car tax.

The tax-free amount you can pay into a personal pension remains at £40,000 per tax year. The lifetime allowance for pension savings has increased though to £1,055,000 (from £1,030,000)

The Capital Gains Tax annual exempt amount for individuals has increased to £12,000 (from £11,700).

Corporation Tax payable on business profits remains at 19%. The government is planning to reduce this further to 17% for the 2020/21 tax year (on 6 April 2020).

If you have employees, there are other considerations, such as workplace pensions that you need to consider - read the full article here: https://www.fsb.org.uk/resources/new-(tax)-year-new-you


Link to HMRC Webinar

Dear customer,

Whether you are a new landlord or just need a refresher, you"ll find practical online help from HMRC.

Start with this specially extended live webinar. Lasting about 90 minutes, this webinar will ensure you have all the guidance you need to get your property income taxes right.

Individuals with income from UK residential property: Join this live webinar to find out about the property income allowance, cash basis and traditional accounting. We also cover expenses and deductions. You can ask questions through the on-screen text box.

Choose your date and time

You can get help anytime with our YouTube channel. There"s a series of recorded mini-webinars starting with 'Part 1 - Property income receipts' and short videos including 'Your income from property tax return'.

The HMRC Online Customer Forum is a good place to go if you"ve got a question about income from property. See what others are asking, ask your own questions and receive responses from the experts.

There"s also our Property Rental toolkit. It"s designed to help agents and advisers, but you"ll find it helpful too.

HMRC"s online guide 'Letting out property' has lots of useful information and is available whenever you need it.

HMRC online - help you can trust.

PDPLA Education Sessions

And if all of this is too much (or if you just need some person to person help to understand how it all relates to you, we recommend you attend one of our tax education sessions running in May and June.

We have 2 courses,  a general 'Landlord & Property Tax Course' and a more specific 'Capital Gains Tax for Landlords'. Both are run by an excellent trainer  (qualified teacher, landlord and tax specialist), Sue Bryer from Landlord Tax Training and are held at the Innlodge Hotel in Burrfields Rd, Portsmouth.

The Landlord & Property Tax Course runs on 31st May and repeats on 28th June, the Capital Gains course is on 13th June. Attendance for members is just £70 and this includes lunch and refreshments and printed handouts from the course. Places are limited to 16 at each event and we do need to have good attendance at all 3 courses if we are to break even, this is not a 'profit making' initiative - it is something that the PDPLA have organised for local landlords as there is a need for such courses locally.

Book you place by clicking the appropriate links below:

Attend 31st May PDPLA Landlord & Property Tax Course

Attend  13th June PDPLA Capital Gains Tax for Landlords

Attend  28th June PDPLA Landlord & Property Tax Course

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Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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