VAT (value added tax) rose from 17.5% to 20% last week. Despite the Chancellor George Osborne indicating that the increase is entirely necessary to fund cuts, economists have warned that the rise may well risk further rises in inflation. Opposition politicians have said it’s a regressive move that will hit the poorest hardest.
So will this have any effect on landlords? Unlike retail businesses or those who charge for services, landlords are not likely to be hit all that hard by the VAT rise. Rents, after all, are not subject to VAT. However landlords will be affected when they buy goods for their properties and also when they buy services such as plumbing help and the like.
If you are a landlord with numerous properties then it might be worth considering registering for VAT. Even if you have already explored this avenue and have decided against it in the past, it might be time to examine it again in light of the new VAT rate.
Even if you are turning over less than £70k per year it might be worth doing, ask your accountant as he will be able to advise you on all the various schemes available.
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