This week's budget held little news for landlords, however after several years of punishing tax changes, this is not necessarily a bad thing.
There had been rumours more change could be on the cards, after the Office for Tax Simplification (OTS) last year recommended Capital Gains Tax should be increased to bring it in line with income tax.
Instead Chancellor Rishi Sunak announced minor changes to welfare and deadlines for tax payments and digital compliance including:
- Changes to the deadline for the payments of Capital Gains Tax (CGT). The new deadline for reporting and paying Capital Gains Tax has now increased from 30 to 60 days.
- An extra year for sole traders and landlords with income over £10,000 to prepare for Making Tax Digital (MTD). MTD for Income Tax Self-Assessment (ITSA) will now be introduced from 6th April 2024.
- A cut to the Universal Credit taper from 63% to 55% from December 1. This means that for each pound a claimant in employment earns over the ‘work allowance’ their Universal Credit will be reduced by 55p, rather than 63p. The announcement on welfare was, however, tempered by the fact Local Housing Allowance (LHA) will remain frozen in cash terms.
- A pledge to introduce exemptions to the Shared Accommodation Rate (SAR) for victims of domestic abuse and modern slavery. The SAR limits housing benefit support for single people under 35 to a room in a shared house, however the exemption means these vulnerable groups will be able to claim the higher rate, for a one-bedroomed, self-contained property. The changes were due to come in from October 2023, but are being brought forward a year.
Responding to the changes to Universal Credit Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Today’s announcement is welcome news for those private tenants who have struggled to afford their rents throughout the pandemic, despite private rents falling in real terms.
"However it does not undo the damage that previous decisions to freeze housing benefit rates in cash terms will cause. It is simply bizarre to have a system in which support for housing costs will no longer track market rents. The Chancellor needs to undo this unjust policy as matter of urgency.”