Landlord Wear and Tear Allowance to be Scrapped

The July budget headline that mortgage interest relief for private landlords is to be restricted to the basic rate of income tax has perhaps overshadowed another announcement by the Chancellor that is going to leave landlords reeling.

By April 2016, the current system whereby landlords of furnished residential properties are allowed to deduct 10 per cent as a tax break for wear and tear will be no more. Instead, only actual costs incurred will be deductible.

Whilst it is not yet clear how the new fair wear and tear system will work in practice, there is a glimmer of good news for residential landlords, as the Government looks set to reform how they can account for the costs incurred in maintaining and enhancing their rental properties.

Government Issues

At the moment, the issue the Government has is that the law dictates landlords are able to offset their tax liability by 10 per cent, regardless of whether they spend money on improving their rental properties. Feeling this is unfair and out of line with other business types, they are changing the rules. Landlords will still be able to deduct costs, but they can only be genuine ones.

Recouping Losses

This announcement, alongside the headline plans to decrease tax relief on buy to let mortgages down to the basic rate over the next four years, is no doubt going to have you thinking of ways to recoup losses if you are a landlord.

Why not discuss the issue with your bookkeepers? They’ll be able to put together cashflow forecasts and profit and loss projections to help you fathom your way through the forthcoming changes, and make informed decisions along the way.

Fit for Work Service Now in Place

The Fit for Work service, formerly known as the Health and Work Service, is now in place and ready to provide occupational health assistance to employees, employers and GPs, free of charge.

A while back, the Government undertook a review of the sickness absence system in Great Britain, and as a result, decided to set up a health and work assessment and advisory service. The service would have the goal of making occupational health advice much more easily available to employers and employees, so that they were able to manage sickness absence in a more streamlined fashion.

What the Service Includes

The Fit for Work service opens up access to health and work information. This is made available via a telephone advice line for employers, employees and GPs. There is also a website portal boasting a variety of useful advice and information. You can read more in the Fit for Work: Guidance for Employers publication.

There is another element of the Fit for Work service, and that is a referral system that allows qualifying employees who have been off sick for 28 days or more to be referred for a free, confidential occupational health assessment, together with a return to work plan.

The referral service has been rolled out gradually and GPs are able to start referring patients now across England and Wales. Employers can start making referrals from autumn 2015 once GP referrals are complete.

Tax Exemption on Medical Treatments

Also, from 1 January 2015, a tax exemption was made available of up to £500 per year per employee on medical treatments. Again this was aimed at helping to get workers back into their roles after illness. The exemption is applicable to treatments recommended by health professionals within the Fit for Work service, as well as health professionals within occupational health services arranged by employers.

Unsure as to how the Fit for Work service operates? Want to learn more about your eligibility for tax exemption on medical treatments? Talk to your bookkeepers who will be able to advise you accordingly. 

Changes to the Law on Marketing Calls and Texts

When the Information Commissioner’s Office (ICO) was given enhanced powers on 6^th April 2015 allowing action to be taken against companies making nuisance calls and sending spam messages, the whole marketing landscape changed.

Previously, the ICO only had powers to issue a civil monetary penalty if it could be proved that the company behind the marketing had caused ‘substantial damage or distress’. But now this provision has been abolished, it means the ICO can pursue action if it is simply able to prove that a company is in breach of the Privacy and Electronic Communications (EC Directive) Regulations 2003.

Telemarketing Rules

The Regulations permit companies to make marketing phone calls to individuals without prior permission being gained. However, they do provide that the call-making company must first make checks via the Telephone Preference Service register so as to make sure the individual has not opted out of generally receiving marketing calls.

Messaging Rules

When it comes to text messaging, there is a different set of rules. Permission must be expressly acquired before sending marketing text messages and companies must make it absolutely clear to the recipient that they are able to out of receiving future messages, and provide details of how they can do so. 

A substantial number of complaints – 175,330 - were made to the ICO concerning nuisance calls during 2014, and penalties were issued between April 2014 and March 2015 totalling £360,000. Now the ICO has enhanced powers, it is predicted that the penalties will start to rise.

How to Handle Unwanted Calls and Messages

Knowledge of the Privacy and Electronic Communications (EC Directive) Regulations 2003 is vital for businesses so they can make sure all marketing activity is carried out inside of the law.

Unsolicited telephone calls, silent or dropped calls, pre-recorded marketing messages, spam or scam emails or texts: if you find yourself on the receiving end of any of these as a consumer, you can notify the ICO directly.

As a business, if you are receiving silent or abandoned calls then be aware that it could be a tell-tale signal of toll fraud.