Financial

Council Tax

Council Tax is a tax levied by the local authority. It is payable by the person permanently resident at the property. The amount of tax due is calculated on a sliding scale that reflects the property's value. The Council Tax Bands run alphabetically from A to H, with H being the highest. For practical purposes, where the term is at least three months the tenant will be liable for Council Tax.

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Utilities

The tenant will normally be expected to pay the following outgoings together with any standing charges made by the relevant utility supplier, which will normally be transferred into the tenants name at the start of the term. Gas, electricity, water rates, council tax, television, cable TV charges, telephone and internet connection charges.

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Building service charge and buildings insurance

The landlord is responsible for payment of ground rent (in the case of leasehold property), service charges and buildings insurance. N.B. where a property is leasehold it may be necessary to inform the Freeholder or the Managing Agent of a proposed letting.

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Contents insurance

Each party is responsible for insuring their own possessions. It is normally a condition of the tenancy agreement that the landlord maintains adequate contents insurance for his / her possessions in the property. Landlords should always check that their current policy covers let property.

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Deposits

When a tenant signs the Tenancy Agreement he also pays the first rent instalment in advance. In addition, he pays a deposit (bond). As a general rule that is equivalent to a minimum six weeks' rent. That is the Landlord's security against damage and other expenditure or losses caused by the tenant during the tenancy. It can only be used provided various conditions have been fully satisfied. Since 6th April 2007 all deposits must be held in accordance with one of three government approved schemes. Very simply, the deposit can either be paid directly to the government scheme to be held by it for the duration of the tenancy, or the Landlord, or Chard on his behalf can hold it, subject to the authority of a government scheme. If the Landlord wishes to hold it he must become a member of one of the schemes first. Where Chard hold it they do so in a separate client account as stakeholders on behalf of both Landlord and tenant, neither of whom can use it unless authorised by the government scheme. It is repayable to the tenant at the end of the tenancy, less any mutually agreed deductions due under the tenancy agreement (see also 'What is an inventory?'). In the case of disputes, the matter is referred, together with the deposit itself, to the government scheme administrator to settle. His decision is final and binding on both parties.
Useful links: http://www.direct.gov.uk/en/TenancyDeposit/index.htm

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Frequency of rent payments

As a minimum rent is payable monthly in advance. Many corporate tenants prefer to make quarterly payments, although a number of both corporate and private tenants will pay quarterly, six monthly, annually or even bi annually in advance. Rent is most commonly paid either monthly or quarterly.

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Tax for landlords

It is strongly recommended that you consult an accountant for professional specialist advice when preparing tax returns. Broadly speaking all income generated from the letting of your property will be subject to UK income tax at the prevailing rate. Under present legislation, many costs can be off set against the rental income for tax calculation purposes. These costs include: interest on eligible loans secured against the property (BUT NOT CAPITAL REPAYMENTS), letting agents fees, service charges, wear and tear allowance (when furnished) and other costs directly associated with the property. You should clarify what is relevant to your individual circumstances with a tax advisor.

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Tax and non resident landlords

There are specific rules regarding tax for landlords receiving rent who are non-resident in the United Kingdom.

In order to prevent tax evasion by landlords who own property in the UK, but live overseas, current legislation holds any person or organisation passing rental income to a non resident landlord to be responsible for accounting for all monies and payment of tax to Her Majesty's Customs and Revenue (HMCR).

Non resident landlords must register with HMCR in order to receive rental income without deduction of tax, by completing a "FICO" form. Chard lettings is FICO registered and will be able to pay rental income to you without deduction of tax following a simple registration procedure. Alternatively please use the links below to print off PDFs of the relevant forms. There are three categories; Property owned by an non-resident individual, property owned by an overseas company, and property owned by an overseas trust.

For individuals - click here
For a non-resident company - click here
For Trustees - click here

Useful links:
HMCR non-resident landlords scheme – full notes
The Institute of Chartered Accountants in England and Wales

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Our fees

Most agents want all their fees in advance. Perhaps they're worried that if the tenant doesn't pay, they won't get paid. We're happy to collect our fees quarterly in advance where we are collecting rent. We collect rent for the majority of our clients. This offers our clients the benefit of better cash flow as they receive rent as soon as a tenant moves in. It also means that unlike many agents we only have an incentive to introduce tenants who will pay their rent in full – and on time!

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Valuations

We offer all landlords a free pre-letting valuation service without any obligation on their part. We will advise on the market for the property, likely tenant profile and achievable rent. Our valuers have extensive experience of the local market, dealing with thousands of transactions. They are on hand to answer specific questions relating to the proposed letting.

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