A Landlord’s Guide – Right To Rent & Digitalisation of Tax
There are a couple of key changes on the cards for Landlords and Renters in 2022. We’ve summarized the main points below.
Right to Rent Update
Tracey Chuter MARLA & Lucy Chuter MRICS, FARLA, MAAT
The temporary changes to Right to Rent checks due to the pandemic end on 30th September 2022. Until then, checks can continue virtually. Tenants can send scanned documents or a photo of their documents. If a tenant (prospective or existing) cannot provide any of the accepted documents, landlords and letting agents should use the Home Office Landlord Checking Service.
Online Checking Service
Both letting agents and landlords can use the Right to Rent Online Checking Service on GOV.UK to view a tenant’s (prospective or existing) immigration status. There will be no need to check physical documents when using the online service, as information is provided in real-time directly from Home Office systems.
As of 6 April 2022, landlords and letting agents need to use the Right to Rent Online Checking Service for Biometric Residence Card/Permit holders (a Biometric Residence Permit is proof of the holder’s right to stay, work or study in the UK). After this date, it will no longer be possible to carry out a manual check using an individual’s Biometric Residence Card/Permit. However, if landlords and letting agents choose to undertake a further online check and identify that an existing tenant no longer has a Right to Rent, landlords and letting agents must make a report to the Home Office using the online form.
Identification Document Validation Technology (IDVT)
From 6 April 2022 both landlords and letting agents will be able to use certified IDVT service providers to carry out digital checks on behalf of British and Irish citizens who hold a valid passport (or Irish passport card).
Landlords and the Digitalisation of Tax
Liz Thompson AA TQB
Are you a Landlord with rental income above £10,000 a year?
From 6 April 2024 if your income from property rentals, including furnished holiday lets, exceeds £10,000 per annum, you will need to register for ‘MTD for ITSA’.
What is MTD for ITSA?
Making Tax Digital for Income Tax Self-Assessment replaces the Self-Assessment tax return. You will need to register for ‘MTD for ITSA’ as this will not happen automatically. Alongside this, you will need to ensure that you are keeping digital records of your rental income and expenses on software that is compatible with ‘MTD for ITSA’ and provide HMRC with quarterly updates.
What happens next?
The deadline to register is 6 April 2024, so even if your rental income does not exceed the threshold now, it may do come the deadline, so you need to be prepared.
If we’re currently managing your properties then we are already keeping your records in a digital format that is compatible and will be very happy to talk to you about how we can enable the process for you.
For further information about these changes and how we can help you get ready, please do give us a call.