Listen up Landlords, things are going to change, and you’re not going to like it, so here’s how Companies999 can help.
Your profits will fall, and your taxes will rise. That’s right, as the government’s mortgage interest tax relief changes (it’s long so has to be important) are impacting buy-to-let landlords all over the country thick and fast.
It was announced in the Government’s 2015 summer budget. When we was all enjoying this country’s stunning sun rays..they spoilt the party with new rules and regulations, so thoughtful.
What is happening to my money!?
It’s complicated (as always) but in a nutshell, when a landlord files their tax returns this year, the amount of mortgage interest they balance against their tax bill will be significantly reduced.
Bad right? It get’s worse.
This figure is set to drop each tax year until it’s fully replaced by a tax credit for mortgage interest in 2020-21. So basically, property investors will see thousands of pounds of potential profits completely wiped out, kaput, zilch.
Here is the brutal honest truth of what is to come:
And here is an example of how your finances will look like:
Mark your calendars, it will be the April 2020-21 tax year to be exact. The dreaded month that will see mortgage interest tax relief replaced by a tax credit limited to the smallest basic rate, just 20%.
It’s even more punishing for higher-rate taxpayers. It will force landlords to declare higher incomes, pushing them into a higher tax bracket, and nobody wants that. There’s not just one worst scenario, there’s two: the clearance of profits for higher-rate taxpayers and the bullying of basic-rate taxpayers into the higher brand.
Forget savings, it’s just not happening.
So how do you avoid this?
Great question, now you understand, landlords are going to be hit hard and heavy. To avoid this, first of all relax, read these wise words and thank us later.
How do sports managers succeed? They tactically prepare their game plan in advance, and landlords are no different. To counter these career ending taxation changes, setting up as a limited company will see you reap the rewards from investment properties.
Over 50% buy-to-let mortgage applications last year were made via limited companies, just like us. The signs are clear, make the switch now before your finances goes up in smoke…poof!
A limited company has many advantages. You have total control, holding your own legal identity with the capability to own assets, borrow/lend money, make contracts and sue in its own name, just feel the power. There are many more benefits you need to know about too, and you can read all about them here.
We even compared sole-traders vs limited companies here to conclude it is the best business structure around, and yes we compared the tax, we’re always one step ahead helping entrepreneurs.
How we can help you
The biggest bonus is you will pay less tax if you make the switch from self-employed to a Limited Company (it even sounds better). Just what you wanted right? Let’s do business then. Contact us for a specialized Landlord Package and the best advice on starting a limited company now, it’s our specialty.
Let me guess, you want proof we’re as good as we say we are, right? Well, check out our Facebook Reviews to see our customers satisfaction is always our first priority, and you can easily be next.
Register your company with Companies999 today for the ultimate company formation experience: Business Bank Account, Business Telephone Number, Accountancy Consultation..did I mention all for FREE!?
Simply fill in the form below, and pat yourself on the back. You just made the best move of your career.
Alternatively, if you want instant incorporation call us now on 0121 236 8560 (Monday-Friday 9-5pm BST). We offer full support and guidance in registering your company today. We look forward to hearing from you!