To provide some context for this sum, the NLA said this sum was more than double what Tesco paid in their annual tax bill. Some people will take umbrage at how much (or how little) Tesco is paying, but the most critical aspect of this figure is the sizable impact that private residential landlords have on the economy.
Landlords are important for the economy
After deductions for aspects like finance costs, legal costs, management expenses and maintenance, English landlords have a taxable income of close to £20 billion.
Commenting on the research findings, NLA CEO Richard Lambert is the CEO of the NLA, and he released a statement, saying; “Far from being subsidised by the taxpayer, private landlords make a significant contribution to the public purse. Furthermore, changes to landlord taxation made in 2015 are forecast to increase HM Treasury’s receipts from landlords by almost £2bn – pushing total estimated Income Tax contributions to £5.7bn in years to come. These dramatic increases in landlords’ tax liabilities in the UK have led many to conclude that it is no longer possible to achieve a reasonable return on investment, prompting them to sell their properties and close their businesses. This situation is in stark contrast to the relatively small sums paid by many major retailers and online giants.”
While the comparison with Tesco will make some people re-evaluate the importance of private landlords, the comparison with Amazon will make people very angry or be willing to consider landlords in a whole new light. While the tax liability for private landlords suggest that these professionals pay twice what Tesco pays, this amount was 62 times the corporation tax bill for Amazon in the United Kingdom.
Many landlords feel victimised
There is no denying that big businesses help the economy and you can see why significant firms benefit from allowances, but these figures will make many landlords feel victimised.
While the Government aims to reduce the number of rogue landlords in the industry, some of the actions taken to change the sector penalise all landlords. At a time when there is strong anecdotal evidence which suggests landlords have left the industry due to costs, these figures will leave many people feeling uneasy.
There should be a source of pride in how important private landlords are for the country, but equally, there must be concerns about the level of taxes being paid by private landlords in relation to some major organisations.
If you are a private landlord looking for guidance and assistance in the industry, please contact Holmes Estate Agents, and we will be more than happy to assist you.