Following the news of a report to extend the 30-day payment of Capital Gains Tax to 60 days, landlords are keen to voice their support. The Office of Tax Simplification (OTS) published the proposals on 20 May with considerations to key practical, technical and administrative Capital Gains Tax issues. It is the second report since July 2020 after a request from the Chancellor.
The report covers a wide range of areas—aspects such as moving home or getting divorced to running or investing in a business. OTS have also highlighted concerns relating to the low level of public awareness for the tax gains and how administrative systems could be doing more to support taxpayers. In total, there are 14 recommendations spanning multiple topics.
Data from the report found around one-third of investors that Capital Gains Tax has hit failed to file on time. This was partly due to the changes made to the deadline in April of last year, with the previous timeframe being 22 months longer. Clearly, landlords want the system to change.
Richard Jameson, a partner at Saffery Champness, said: “The problems often come with large and relatively complex transactions such as selling a property when there is a lot of paperwork and legal hoops to jump through. Particularly at a time like this when the property market is very buoyant, conveyancers are in high demand, and delays can be very common. Having all the necessary paperwork ready within 30 days and the cash available to pay the tax bill at the same time is just too ambitious for many taxpayers.”
If the changes are to be made following a review from the government, landlords will have added peace of mind knowing they have an extra month to pay the taxes. The government, however, would stand to lose more than £100 million in penalty payments, according to OTS.
Since it was brought in last year, a total of £935 million was raised due to the 30-day deadline. Seeing as the changes were somewhat in response to the pandemic, a change that is fair to both the taxpayers and the government should be the only realistic solution post-pandemic.
Chris Norris, policy director for the National Residential Landlords Association (NRLA), said: “Landlords should always ensure they meet all legally required deadlines to pay tax. That said, today’s report from the Office for Tax Simplification demonstrates a woeful lack of communication and consideration by HMRC about what is expected of those liable for the tax. It adds weight to the argument that the seemingly arbitrary, 30-day deadline has created more problems than it solves. We would support the OTS in recommending an extension to 60 days to avoid landlords missing a shorter deadline, potentially through no fault of their own.”
The changes will be of huge benefit to landlords across the country and of only slight inconvenience to the government. It will be interesting to see whether these changes are acknowledged and put into effect by the government, but only time will tell if it is the case.
As a landlord, property developer or investor, if you ever have any questions on the rules surrounding property tax, you can always ask your fellows in our Property Tax and Accounting forum thread. With over 65,000 members, you are guaranteed to get advice and support from like-minded people.
Originally Appeared Here