Council to buy 300 homes to deal with landlord repossessions

Reply to the comment left by Tom Crispin at 22/03/2023 - 18:02
Good luck Tom, let us know how you get on!

Reply to the comment left by Judith Wordsworth at 21/03/2023 - 12:43
Just because it's tax deductible doesn't mean it's not an additional cost. It just means you save 20 or 40% of the cost, you still have to pay 80 or 60% of a cost you didn't previously have. If the fee is £1000, that's an extra £600 or £800 that you need to find from somewhere.

Reply to the comment left by Morag at 25/03/2023 - 07:45
OK all being dim.
If a licence fee is an allowable expense in full, say like an ECIR or Gas safety certificate, how is it costing landlords money?
You pay it to Peter and get it deducted before you pay Paul any money due.

Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55
How is it costing landlords money? The license fee (about £1300 in Nottingham) is a COST…. So that’s £1300 you no longer have. That’s how it’s costing LLs money. We can’t just think “oh well I can deduct it from the profits and pay less tax”… if that’s the case… make the license fee “£13k”… and then you’ll have no profit at all! Can you see how it’s costing the LL money now? You pay it… it’s a cost. To get it back, you’ll have to charge more rent… remember - they want to charge you tax on your GROSS sales revenue (total rent in)… and if you’re pushed about the “£50k” per annum mark, then you’re now a 40% tax payer… it’s a real cost. It’s not just a payment it’s a time cost and you can be inspected at anytime. The Notts scheme has been in place since about 2018. To me - it’s just a revenue generator for the council. They say they don’t make any money from it. I don’t believe them.

Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55Judith, like ALL your deductions, being tax deductible just means that the taxman is contributing the portion equivalent to your own tax rate (20% if you're a basic rate taxpayer, 40% for higher rate etc).
Example without licencing fee (basic rate payer, ignoring your tax free element)
Income £10,000
Tax £2000
You keep £8000
Example with licencing fee
Income £10000
Licence fee £2000
Net after fee £8000
Tax £1600
You keep £6400
So you are now £1600 poorer after the licence fee of £2000, the taxman has only covered £400 of it. That's 100% tax deductablity for you!!

Reply to the comment left by Grumpy Doug at 25/03/2023 - 08:46
All councils will eventually be doing this, because there is no way to oppose it. If the cost was, say, £1500, it would have been the net profit for 7 months for the property I sold last year. How is that sustainable for landlords? It's just one of the reasons I've had enough, and my answer is to leave the PRS, and leave the councils to sort out the housing need.

Reply to the comment left by Judith Wordsworth at 25/03/2023 - 07:55
"...If a licence fee is an allowable expense in full, say like an ECIR or Gas safety certificate, how is it costing landlords money?"

Unless the landlord is able to increase the cost of the rent by the amount of the licence fee it costs money.

Taking an oversimplified example with no other costs:
Year 1
Rent is £2,000 per year, no licence fee.
Gross profit is £2,000. Landlord pays tax at 20% on £2,000 (Ie £400) leaving profit of £1600
Year 2
Rent is £2,000 per year, licence is £1,000.
Gross Profit is £1,000. Landlord pays tax at 20% on £1,000 of £200 leaving profit of £800

Year 1 profit £1600, Year 2 profit £800
The licence has cost £800. The landlord has £800 less this year than last year.

Reply to the comment left by Darren Peters at 25/03/2023 - 11:05
Please stop trying to explain this. If a landlord doesn't understand the basics of profit and loss, it won't end well.

Reply to the comment left by NewYorkie at 25/03/2023 - 11:03I fear you are right, all councils will start trying to do this as it's such an easy target for serious cash.
As I recall the landlords in Brighton stop the council applying a licencing scheme by proving to the minister, who must give permission, ( I think that's still the case), that the criteria laid down were not met and therefore no scheme was required. The minister confronted with this withdrew permission. I don't thik that Brighton have found a way round it yet?
Again memory, didn't Nottingham fail to show that the revenue was bing used as required, to improve letting standards. Wasn't there some issue that they made X in revenue, (supposedly to fund the team to do checks etc), but had only inspected some 26 properties in 2 years?
It strikes me that the only way to fight it is to prove a council are not following the ministerial guidance and criteria. If that can be proved, then there is a fighting chance to dismantle the licencing.
Like many others, should licencing effect me in the future I would sell up and retire fully. I'd be sorry for my tenants, most of whom I've had a long time.

So a man selling a Mars Bar in a shop is not allowed to put his prices up. If people want cheaper, they go up the road to another shop.
Except the Council & Govt has made it impossible for the tenant to find another house up the road.
So now let's tell the Landlord he has to be a charity. Except that is what a Council house is for. Not a Private individual who allows u to rent u his house on terms to suit both.

And then this Council decides to bring in Licensing. You couldn't make it up. Watch the homeless increase now.

I want Nottingham Council to buy a lot of my houses. They refusing to talk at moment.