There has been a ‘surge’ in enquiries to accountants from landlords concerned about the tax changes outlined in July’s Summer Budget.
The report comes from accountancy firm Phillip Bates & Co, which has over 100 landlord clients.
It was announced in July that landlords’ current tax relief rate of 40% will be phased out from April 2017 and then cut to 20%.
The government also confirmed its intention to scrap the annual wear and tear allowance –which allows 10 per cent of rental profits to be written off for notional wear and tear – and replace it with a tax relief system that means landlords will only be able to deduct the costs they actually incur on replacing furnishings.
Phil Bates, Principal at the Cheshire-based firm, says that the changes will cause major upheaval for many landlords and that buy-to-let investment will become a less attractive proposition to new investors.
He says, however, that there is still plenty of time for landlords to work out their long-term plans in conjunction with their advisers.