Tax and benefits

This guide explains how and where a landlord can make a request for direct payments through the Universal Credit system and apply for deductions from the tenant's ongoing Universal Credit payments to recover outstanding rent arrears, but only where the tenant continues to live in the property to which the arrears relate. 

The purpose of this guide is to outline how landlords can help tenants in making Universal Credit claims. It covers signposting on starting a claim, what sort of evidence the tenant will require, resources that landlords can use from the Government, and how it affects tenants who transition from other legacy benefits, as well as answering some other common questions about Universal Credit.

As part of their response to the coronavirus pandemic, the Government has increased the amount of local housing allowance paid to tenants claiming housing benefit or Universal Credit. This page outlines the new rate in your area until March 2021.

The National Audit Office estimates that more than one in every ten pounds paid through Universal Credit is paid in error. To recover this, or overpaid housing benefit, the DWP or the local authority can reclaim these overpayments. Often this is done by chasing the landlord, however more often than not the landlord can challenge this on the basis that the tenant was the person at fault for the overpayment.

Universal Credit expert Bill Irvine explains how to challenge overpayments in this guide.

In general, as long as a tenant is resident in the property they are liable for the council tax. However this is an area with some nuance and landlords may be liable depending on how the property is let, who it is let to, and whether or not a tenant remains resident in the property. 

If you are in receipt of rental income, you must consider your tax implications, and ascertain the correct approach as to how and if this needs to be reported. In a lot of cases, it will mean you need to submit a self-assessment tax return. To help you with this our partners at rita4rent have produced a guide to filling out a self-assessment.

In recent years a number of different changes have been made to the tax regime. Most notably the changes to mortgage interest relief and stamp duty land tax. Our partners at rita4rent have produced guidance on these changes to help you understand how they affect you.

In recent years, HMRC have become more aggressive in penalising those who file and/or pay their taxes late, and in light of this, we summarise below a selection of dates for your diary in 2020/21. This should ensure you are aware of the full position, and that no deadlines are missed!

This property accounts spreadsheet will help you keep thorough and complete records of your property whether for business purposes or just your own personal portfolio. In addition, it is good practice to separate records between properties, especially if you let more than one. The spreadsheet is organised so you can instantly compare and contrast similar costs for up to 10 properties on the same page, while also allowing you to delve into the specific cost types to each of your properties.