Autumn Budget 2018: a summary for landlords

Following Philip Hammond’s Autumn Budget announcement, we’ve taken a look at what it could mean for landlords in the UK – including changes to the income tax personal allowance and higher rate thresholds.

Even though the 2018 Budget was relatively light on announcements for landlords and the private rented sectors – the most important announcements were around personal tax, including the changes to the personal allowance and higher rate income tax thresholds.

Landlords have been at the sharp end of taxation changes in recent years. So, what does today’s announcement mean for landlords and the private rented sector when it comes to tax?

Housing and tax

• The income tax personal allowance will rise to £12,500, and the higher rate threshold to £50,000 by April 2019. From this point, they will both be indexed to inflation.
• From April 2020, letting relief on Capital Gains Tax will be limited to properties in which occupancy is shared between owner and tenant.
• The threshold for VAT registration will remain unchanged for two years.
• A further £1 billion will be made available to help the transition for those moving to Universal Credit, with the Chancellor acknowledging criticisms of the scheme. The taper rate will also be reduced, in order to make the transition smoother for claimants who are also in work.

What are the most significant changes since the 2017 Budget?

Compared with recent changes, landlords have got off lightly in the 2018 Budget. The last few years have seen a raft of tax and legislative changes that the sector have railed against, most notably the scrapping of tax relief for mortgage interest payments.

UK landlords may find themselves breathing a sigh of relief today, as restrictions on the private rented sector do not appear to have been tightened any further.

If you’re a landlord looking for bookkeeping, tax or VAT help and advice, please don’t hesitate to get in contact with us.