By Ashley Preen
June 29, 2020
UK landlords have had a tough time of late.
In March, the UK government imposed a “radical package” of measures which effectively banned all evictions from “social or private rented accommodation” for three months.
Now, as the three-month period approaches a close, things got more difficult for landlords when Housing Secretary Robert Jenrick tweeted:
“We are suspending evictions from social & private rented accommodation by a further two months.
“Eviction hearings will not be heard in courts until the end of August and no-one will be evicted from their home this summer due to coronavirus.
It would be a callous landlord indeed who insists on evictions for the folk who regularly pay their rent, but who have fallen on rough times.
But what about problem cases that existed before the crisis?
This is where landlords have their hands tied.
First of all, it’s important to take a deep breath.
Landlords get a bad rap, but the vast majority are trying to do right by their tenants.
As a landlord, you must take a deep breath and realise that everyone is going through a tough time financially.
As for the problem cases, your hands are tied on evictions for now. It’s one of those terrible side-effects of many of the government’s recent decisions.
If the government’s decisions were wrong, this can be sorted out with litigation at a later stage.
Right now the matter before you is how to stay afloat despite the crisis: The way to do that is to sift the bad eggs from the good.
And then to appeal to the good for assistance.
There is no point in communicating with the bad egg. If they were not paying their rent for months before the crisis, they will not pay it now.
But you can communicate openly and freely with those that were paying it regularly before.
These people are struggling like you are. They might not be able to cover the entire rent, but if you speak to them individually and explain that it is imperative that they cover at least some of it, many of them might indeed pay more in the coming month than they had been planning on.
They will eventually have to pay the rent anyway, so it is actually a help to them to get them to pay as much as possible now.
The important thing is to be compassionate and understanding. People are under pressure. Tempers are flaring higher than usual.
Following a simple principle of mutual understanding, you might indeed be able to get far more rent paid immediately than you had been expecting.
If you are truly struggling, and your property is mortgaged, you could apply for a mortgage payment holiday.
The jury is still out on whether or not this is a good idea for landlords. But it is indeed an option if your own debts are stacking up as a result of rent defaulters.
Once the crisis is over, of course, it’s time to look at improving your financial position so that such a crisis doesn’t hit you so hard ever again.
If you can hold your breath long enough, you could make a claim on your insurance if the tenant has been in arrears for several months, and you have served notice on them. (source)
Raising rents during the coronavirus crisis is legal.
This is a fairly aggressive approach. It means you would be penalising those who are paying their rents because of those who aren’t.
This is a decision you must make yourself. It is not our position to let you know what is right or wrong, only to give you your options.
Raising rent is indeed an option you have.
Keep in mind, however, that those who do pay the higher rate are unlikely to stay with you once they are able to move. On a long-term basis, this option might not be the best strategy.
With the “bad eggs”, it’s possible to take a slightly tougher approach.
Once the eviction ban comes to an end, you can serve notice on those who have been constantly in arrears.
Tenants are indeed expected to pay rent. Many of them have misunderstood the “mortgage holiday” to mean that rent does not need to be paid. This is not the case.
Times of extreme challenge can also be the times of greatest creativity.
Many people are changing their businesses and career paths entirely in the face of the COVID-19 crisis.
One — albeit, unusual — way you could raise extra funds is to start an entirely new venture and go off to one of the crowdfunding platforms to get it funded.
The idea is not without precedent: This card game of exploding kittens was supposed to raise $10,000 and ended up raising nearly $9M!
Would £9,000,000 cover your arrears rent for the last few months?
This last point is not a joke. We must all look at how we were operating before, and find new ways to increase our income streams so that we are not stuck with only one solution in the future.
Hotels were hit the hardest by this crisis. The only option they have is to start a new business entirely.
And so this option exists for the landlords as well.
We're glad our customers are happy with our products and services. Here's what some of them said about us...
Pearl Accountants are unique as you can get. They have a great one to one service and they always answer your queries in a fast and professional manner.
I find Pearl when I opened up my limited company. I was clueless, but Pearl Accountants kindly assisted me in the best way so I felt at ease and understood how the operation works.
Everything was explained clearly in detail and I could ask as many questions as I wanted. They were never rude or impatient, just happy to be there to help.
The client had previously missed a few deadlines with HMRC and Companies House and needed a hands on approach
Wanted to ensure they have a proactive team so that no deadlines were missed and full end to end bookkeeping carried out
Client was introduced to a dedicated accountant who filed all outstanding accounts and appealed for any penalties by HMRC
After being in business for years, I must admit that Pearl Accountants are far the best accountants I have worked with. They are helpful, friendly and trust worthy and most of all provide excellent tax advice.
They provide high-level client care. I would certainly recommend Pearl Accountants to all.
Invoice factoring complications led client to inaccurate bookkeeping and unclear of clear reporting requirements
Processing the invoicing system accurately with clear and transparent management reporting was key
Processing the invoicing system accurately with clear and transparent management reporting was key
Pearl Accountants have been my accountants for many years and have been a great asset to my businesses. They have a strong team and knowledge is second to none. Very happy with the service and professionalism from them. Will continue to recommend them to my network.
Paying huge taxes without any tax efficiency and lack of understanding on various VAT aspects.
Minimise tax bills and ensure the business was compliant with HMRC and Companies House
As a startup graphic design company, we ensured the client used tax allowances and efficient payroll structures to withdraw money
Holborn based laser hair removal company joined us with a view to expanding their business on a large scale. They undertook accounting and advisory services which helped them grow above their rivals.
Holborn based laser hair removal company joined us with a view to expanding their business on a large scale. They undertook accounting and advisory services which helped them grow above their rivals.
Achieve a national presence and grow organically through current business model
We came on board and advised client on tailor made business strategies to achieve their online and brick and mortar presence.
We have been using Pearl Accountants for over 10 years and developed a very good business relationship. Very clear instructions with easy to follow accountancy system in place. Great expertise in tax efficiency, as well as business, grow and development services. One of the best-chartered accountants in town.
We have already recommended your services and will share our good experience with others in future.
It is always someone available on the phone but if not available at the time your accountant will always call you back.
Complete peace of mind with prompt and clear communication so no deadline missed.
Very satisfied.
Client was growing very fast with inability to keep track of growth with no cloud accounting setup and no integrations
Time saving on bookkeeping and clear vision of profitability management reports. Setup with cloud integrations.
Recommended a online cloud solution with time saving applications and clear breakdown of monthly profitability.
We recently migrated to Pearl Accountants from large national accounting firm. Transfer was easy and faultless. Friendly staff at Pearl lead us through the process with ease. Initially we were drawn to their service because of their attractive pricing structure. However it quickly became apparent to us that we were getting a lot more for our money than we initially thought as they are happy to stretch the engagement to all sorts of additional advice. Thumbs up to Pearl Accountants.
No clear strategy for business growth or tax planning reduction techniques
To achieve business advisory, tax planning and accurate reporting requirements
Recommended a online cloud solution with time saving applications and clear breakdown of monthly profitability.
Our client, a well established practising solicitor in the UK required a headache free service to ensure their accounting requirements were met and cloud accounting solution setup
Too much time was being consumed in bookkeeping and previous accountants missed various deadlines
More time was needed to focus on the business and ensure a firm came on board to take full ownership.
Advised client to forward us everything in ‘shoe box’ style and provided full breakdown regularly to keep informed.
They make me feel that I am a valued customer and to me what makes Pearl accountants unique is their helpful team of dedicated staff members. Their response is always prompt and it makes the daunting task of accounting really easy for me. Pearl Accountants is really a five-star accountant company.
As a franchisee tuition business, the client did not have the right advise to reduce taxes or a proactive accountant to advise where needed
Reduction in taxes through governmental tax subsidiaries and requiring more time to focus on the business.
A dedicated accountant was assigned to ensure deadlines were not missed and review of tax strategies.
Our client was in need of a specialist contractor accountant to remain compliant and ensure they did not fall in IR35.
Client required advisory on payroll and VAT solutions and filing of accounts at year end.
No clear direction on IR35 nor guidance on allowable expenses that could be claimed.
Ensure the contractor company was compliant with HMRC and Companies House and advisory on saving taxes.
Provided a full explanation and review on IR35 and guidance provided on which expenses could be claimed to reduce taxes
Our client having a property portfolio in Switzerland required a specialist accountant that understood the UK tax legislation whilst having a thorough understanding of overseas tax implications.
Overseas and UK income not declared, needed tax returns filed for previous years and appeal to HMRC for outstanding penalty
Paying taxes in the UK and overseas, wanted help understanding the tax system so avoid paying taxes twice.
Appealed successfully for prior years penalties and filed all outstanding returns. Thorough review of all tax allowances available.
Our client joined us after losing track of their finances and needed someone they could turn to for help. We came on board and reviewed their internal bookkeeping arrangements and recommended efficiency to lower their input on areas which could be outsourced to us.
No real track of profitability or clear vision of expenditure along with weak internal processes.
To achieve a clear breakdown of expenditure and ensure the current setup for bookkeeping was run more efficiently.
Recommendation on reporting packs, internal processes and online applications to integrate for payment reconciliation.