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More Mountains to Climb for Landlords in 2017 as HMRC Sanction More Checks

Additional Checks on Rental Income Tax

After an array of new legislation for landlords in 2016, it seems 2017 isn’t going to ease off. HMRC warned at the end of last year that there will be stricter sanctions on comparing the income declared to HMRC for tax purposes, and the income declared to the mortgage broker to obtain finance.


This article does not constitute advice. Professional advice should be taken prior to acting on any part of it.
The Financial Conduct Authority does not regulate tax advice. 


The clamp-down continues

Landlords are about to face changes to the tax relief they are able to claim on their mortgage interest, which is due to take effect from April 2017. By 2020, landlords will only be able to claim tax relief on their mortgage interest at the basic rate of tax, which is currently 20%, even if their rental income is taxed at the higher rates of 40% or 45%.  This system is being tapered from April 2017 to 2020.

Additionally, landlords are already finding it increasingly difficult to raise finance for their investments, due to new affordability tests by lenders. 

This is expected to accelerate further in 2017 as The Prudential Regulation Authority are bringing-in stricter underwriting rules that could reduce the amount landlords are able to borrow.


Next on the hit list – comparing facts & figures

HMRC have warned all landlords to ensure that all rental income is declared correctly on the self-assessment tax return.

If the income declared to the lender or mortgage broker is in any way different to the income declared on the tax return, HMRC will be able to spot this, due to the stricter affordability checks and availability of shared information. 

Mortgage advisers are unable to provide tax advice to those landlords seeking a mortgage – they are not qualified to do so. Tax advice needs to be taken from a qualified accountant.

Working with both a specialist accountant and a specialist mortgage broker will ensure that you haven’t left any stone unturned, and don’t fall at risk of being caught out.


Need help with a buy-to-let mortgage? Speak to Chris

Dental & Medical Financial Services have been helping doctors and dentists with mortgages for over 25 years. If you need a competitive buy-to-let mortgage, we can discuss your options. 

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