The National Residential Landlords Association has suspended its link with Less Tax 4 Landlords.
This follows publicity surrounding Less Tax 4 Landlords and the issuing of new guidance to landlords regarding so-called Hybrid Partnership schemes.
At the end of last week HMRC issued a warning over a tax avoidance marketed as a tax planning option available to individual property landlords to structure their property business – it’s sometimes referred to as a hybrid business model.
HMRC alleges that the scheme attempts to by-pass mortgage interest relief restrictions allowing increased deductions for mortgage interest, reduce the tax payable on profits generated by the property business, cut Capital Gains Tax payable when properties are sold, and reduce Inheritance Tax payable on death. And HMRC warns landlords to steer clear of such a scheme or, if they are already involved, to withdraw and let the tax authorities know.
The NRLA statement announcing the suspension of the link is here:
“The NRLA exists to support its members in running profitable, sustainable, and above all legally compliant businesses. This includes paying all the tax legally due against their lettings activity.
“We pride ourselves in being experts in the field of landlord and tenant operations but recognise that at times our members need a wider network of qualified and accredited specialists. Tax advice is one such area. When selecting third parties we do so in the knowledge that our members put trust in the NRLA to advertise only legitimate and reputable companies with an offer likely to be of value to responsible landlords.
“In the case of tax advice and accountancy services, we recognise and carry advertising on behalf of several specialist firms. All of these companies undergo robust due diligence checks and are expected to maintain relevant qualifications and affiliations as required by their industry and regulator(s).
“In recent weeks we have become aware of speculation concerning business structures promoted by one of the NRLA’s commercial partners, Less Tax 4 Landlords Limited. Less Tax 4 Landlords is an appropriately qualified and affiliated firm and part of a group regulated by the FCA and SRA respectively.
“However, we have a duty to ensure that all companies promoted to the NRLA membership offer the highest quality and level of service. As such, while we investigate these claims, we have suspended partnership activity with Less Tax for Landlords.”
And separately, Less Tax 4 Landlords has this statement on its website:
“This is an important message to all clients and contacts of Less Tax for Landlords. We are currently contacting HMRC regarding the recent publication of new guidance on their website for Hybrid Partnership arrangements, a type of structure that LT4L use with some of our clients.
“The implication is that there is a requirement to register with HMRC under DOTAS, and we are currently looking to clarify our position to ensure that we remain compliant at all times. As a company, we are committed to providing the best possible service and we are doing everything we can to obtain the full picture, at which point we will advise further.
“Please note that whilst we undertake this exercise we will not be accepting new appointments in line with the guidelines, although existing clients can contact us through the usual channels.”
You can see our story about the HMRC guidance in question here.
