A survey suggests that 77 per cent of buy to letinvestors believe their tenants can pay full rent during the Coronavirus outbreak.
The survey is small however – only 200 landlords – but it suggests that 16 per cent of landlords have voluntarily offered tenants a rent reduction of anything from 20 to 100 per cent.
Mike Parkes of GoSimpleTax, the firm behind the survey, comments: “It’s worth saying that landlords won’t pay tax on rent they don’t receive if they elect to report their rental income and expenses on the ‘cash basis’. Landlords will be able to use this basis of calculating income and expenses for their self-assessment tax return if their rental income from residential tenants is less than £150,000 in the year.
“If the deferred rent is received in a subsequent year, it will be taxable on receipt but if it transpires that the rent is never paid, again, this does not present a tax problem.
“It is positive to see that landlords are in open discussion with tenants, and that a large majority of renters have the ability to continue paying full rates. In such an unparalleled situation, it makes sense for all parties to keep communicating regularly and to be open with each other about their respective situations.”
This post has originally been featured in Letting Agent Today.