Landlords and tenants: the government measures to support landlords and tenants during the coronavirus crisis.
Self-employment income support scheme
- General property landlords are unable to claim under the COVID-19 self-employment scheme in respect of lost rental income: rental income is investment income and not trading.
- Conversely, Furnished Holiday Letting (FHL) is specially treated as a trading activity for Income Tax, Corporation Tax and Capital Gains Tax (CGT) purposes.
- Where a FHL business involves the provision of extra services, it may be reporting its profits as a trade and have used the self-employed pages of the self assessment return or partnership return. In the case where a holiday trade exists, it will be possible to claim relief under the Self-employed Income Support Scheme (SEISS).
- Smaller FHLS who report their profits in the Land and Property section of the return are unable to make a claim under the SEISS.
- FHLs may well not meet the required occupancy conditions for the 2020/21 tax year, in which case the period of grace rules will provide relief.
See COVID-19: Self-employment income scheme
Deferral of Income Tax payments
- Landlords who pay Income Tax under Self Assessment can delay making their second payment on account for 2019-20, which is usually due by 31 July 2020.
- Landlords choosing to delay payment will have up to 31 January 2021 to pay.
See COVID 19: Deferring Income Tax payments
CGT: Soft landing on penalties under a new 30-day reporting regime
- HMRC have announced that they will not charge any penalties for failure to report Capital Gains on UK residential property within the new 30-day deadline until after July 2020.
Coronavirus Job Retention Scheme
Large landlords may need to lay off some of their maintenance staff or directors during the crisis if social distancing is too difficult to achieve.
- Landlords who are employers may claim a grant of up to 80% of the salaries of employees, subject to a cap of £2,500 per month, instead of making them redundant, due to the adverse effects of the coronavirus.
- A sole director company landlord may furlough the director in respect of their employment duties.
See COVID-19: Coronavirus Job Retention Scheme
Ban on evictions
Private or social accommodation
- Landlords will not be able to start proceedings to evict tenants for at least a three-month period during the current emergency.
- Landlords whose tenants are experiencing financial difficulties due to coronavirus will receive a three-month mortgage payment holiday.
- At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
- The Coronavirus Bill provides that no business will be forced out of their premises if they miss a rent payment in the next three months.
- All commercial tenants in England, Wales and Northern Ireland are eligible.
See Press Release: Complete ban on evictions and additional protection for renters
Business taxes: Time to Pay
- All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
- These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
- It is essential to contact HMRC and make a Time To Pay agreement before the tax debt becomes due.
See COVID-19: Time to Pay
Empty property and business rates relief
- Under the government's existing rates relief policy, landlords do not have to pay business rates on empty buildings for 3 months.
- The Expanded Retail Discount scheme gives local authorities discretion to allow a business rate holiday to retail, hospitality, leisure and child nursery businesses.
See COVID-19: Business Rates
Making Tax Digital for Income Tax
- It was originally proposed that this new tax accounting system would commence in April 2020.
- It is now postponed until at least 2021. In the meantime, HMRC's MTD for Income Tax pilot scheme is up and running and this may be an ideal time to try it out and get your systems in place.
COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.
Other people's homes
Guidance for people working in, visiting or delivering to other people's homes.