Rental Arrears associated with Coronavirus

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  • fro
    replied
    Originally posted by philg View Post
    had a tenant ring me earlier in month and i agreed a reduction of about 40% as they are wonderful tenants , today i got a text to say they could pay the full amount !!! must say i was rather over the moon really , did not expect that and don`t think many would do that !
    wow - they are really wonderful tenants amazing

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  • JK0
    replied
    Originally posted by JK0 View Post
    Oh, well then she needs to crack on with the tax return while she has time off work. Maybe she'll even have less to pay than she thinks, so will be able to pay her rent?

    BTW, there's a payment due 31st July, which is known. There's no reason that cannot be made, is there?
    It just occured to me that we probably all need to have a quiet word with our accountants when we submit our returns. Normally we have to pay an amount equal to half of our 2019/20 tax on 31/1/21 and half on 31/7/21.

    Now, certainly my 2020/21 income will be a small fraction of my 2019/20 income due to electrical upgrades, and tenants moving out left right & centre in fear of corona virus. If I have to pay the same amount in Jan & July next year, as my tax will be this year, I will be seriously short, albeit that I'll get it all back the following year.

    Think on guys.

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  • nukecad
    replied
    Originally posted by kennyj52 View Post
    she is currently ineligible for UC because her savings are above the allowable limit as a consequence of saving up to pay her 2019-2020 tax bill
    You may want to inform your tenant that such savings are classed as a 'business asset' and disregarded for UC purposes.

    (It might also help if it's put into a seperate account specifically to cover future tax payments).

    In addition, questioned about the treatment of money set aside by the self-employed in relation to their liability for tax, Minister for Welfare Delivery Will Quince responded -
    '... we have given very clear guidance ... that money set aside for tax liability can be considered to be a business asset and therefore doesn't fall under the £16,000 savings rule.'
    https://www.rightsnet.org.uk/welfare...iversal-credit

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  • jpkeates
    replied
    You can always pay tax on account - she should just make the payment.

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  • JK0
    replied
    Oh, well then she needs to crack on with the tax return while she has time off work. Maybe she'll even have less to pay than she thinks, so will be able to pay her rent?

    BTW, there's a payment due 31st July, which is known. There's no reason that cannot be made, is there?

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  • loanarranger
    replied
    JKO you are indeed correct but clearly the Self Assessment has yet to be made so unless she jumps ahead and makes a provisional payment which would bring it below the threshold she disqualifies herself from the UC entitlement.

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  • JK0
    replied
    As long as the tax money is in the taxman's bank, rather than the tenant's I'd have thought it would not be counted against benefits.

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  • philg
    replied
    had a tenant ring me earlier in month and i agreed a reduction of about 40% as they are wonderful tenants , today i got a text to say they could pay the full amount !!! must say i was rather over the moon really , did not expect that and don`t think many would do that !

    Leave a comment:


  • loanarranger
    replied
    Regrettably the fact that she has monies will not help sway her entitlement to UC even though they are scheduled to pay her tax, which will be paid in two halves , one part on submitting the Self Assessment and the balance 6 months later. So in short your tenant has monies which can meet her rent and in the meantime she will have until Jan 21 to save up for the first part of her tax bill and first part of her estimated tax liability for 20/21.
    As you quite rightly say , she is way off from being poor and has a legal obligation to pay her rent .

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  • kennyj52
    replied
    I agree with the reasoning of you both though this may not now be of immediate concern as my tenant has just informed me that she is currently ineligible for UC because her savings are above the allowable limit as a consequence of saving up to pay her 2019-2020 tax bill - presumably not due until January 2021. She is now investigating with her accountant to see whether she can pay off some tax on account in order to get under the savings threshold and so be eliginle to claim back UC from the government - somewhat of a money merry-go-round. Seems to me though that she's a way off being down and out yet.

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  • loanarranger
    replied
    JPKeates echos exactly my concerns , it is all well and good asking for a rental holiday concession but if the current payments were taking a significant part of take home pay then it is not unreasonable to ask how that person intends to pay the current rent plus even three months rent arrears let alone the possibility of this extending beyond this period given the high probability of any further concessions on other credit would ultimately force them to try and do a runner in the mistaken belief that they can then start again with a clean sheet.

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  • jpkeates
    replied
    The question to your tenant is how, even if you offer them a rent "holiday" they would be able to pay the increased amount to cover the repayment of the rent they'd missed afterwards.

    Universal Credit is means tested, so the only reason they wouldn't qualify is that they can afford to pay rent.
    How about you offer to consider the issue when the tenant has confirmation of how much they will receive in benefits and when.

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  • loanarranger
    replied
    I have drafted letters for my clients to send to tenants, clearly there has to be a declared intention to help but only if all avenues have been explored and the individual will have the capacity to not only recommence making their normal contractural rental payments but can also repay over say the next three / six months the accrued rental Arrears.Today the responses have been pretty fair with tenants realising that they could be digging a mega hole from which they cannot escape from.
    From the comments made and forgive the cynicism but I suspect that whilst your tenant may be self employed , no self assessments have been submitted and by default is automatically excluded from being able to submit a claim under the Self Employed salary grant.
    As you are dependent on this income to make end meet , if you are soft then you are unlikely to get your rent arrears repaid and at some point they will do a runner.

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  • kennyj52
    replied
    I have also recently received a "compassionate" email request from one of my tenants. And, as with the majority of you, here I want to do what is reasonable and fair given the current difficult circumstances. But I am recently retired and now rely for my income wholly on my state pension and rental income. The tenant is self-employed and has no work at the moment and is not confident about the prospects of work in the near future. When I asked about help for the government's Self Employment Income Support Scheme (SEISS)", the response was rather vague - "
    it won't be very much, because I haven't yet paid tax on my main trading year". Also about Universal Credit (UC) - "I am not sure it would be possible/make much of a difference".
    The tenancy has been running for 6 months on a 1 year AST and until now has been without issues and while I believe the tenant is genuine and sincere in highlighting her predicament to me, I do feel that she has not really exhausted the other avenues open to her to supplement her income and is taking the "easy" option by asking for my help - in common with so many youngsters of her generation (including my own daughters) expecting financial bail-outs by the older generation.
    Nevertheless, I would like to offer her a mutually agreeable solution e.g.: T
    o allow time for the SEISS and UC schemes to kick in,
    starting off with a reduced rent, balance deferred to be reviewed on a month by month basis. I don't want to just simply reduce the rent because the property is a shared tenancy between the tenants and I feel I would be obliged (in fairness to the other tenants) to offer them the same deal even though they have not yet been affected by the current crisis in this way.

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  • theartfullodger
    replied
    As more and more people self-isolate with their families I'm expecting divorce & split-up rates of co-habiting couples to go up... It would be ungentlemanly to say what prompted this thought.

    Keep safe folks!#

    Artful: 72 ... still feeling good!

    Leave a comment:

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