Have you made sure that tax has been paid
on your employees' rental homes in the UK?
In case you’re not aware, SDLT is the tax that must be paid by renters in the UK depending on the rental value of the contact. It now has to be paid within 14 days of the lease start date and no refunds are given even if the tenant vacates early, for example under a break clause.
Where the employee is the tenant (which is mostly the case these days), they are personally liable for the tax. But in our experience, employers who are on top of this issue tend to take responsibility for filing the return and the company pays the tax on behalf of their employee under the principle of keeping the employee whole.
On the other hand, we’ve found that a lot of employers neglect to ensure that the SDLT is paid. This is very risky and, as with all unpaid taxes, can lead to substantial interest and penalty costs being levied by HMRC – and an extremely unhappy employee – usually a senior executive in your company!
The SDLT tax is most relevant to high-end rentals (therefore mostly in London) because it bites where there’s a high rental value and/or longer rental period. In most cases, it will not apply in the first year but it must be remembered that the rental value for SDLT purposes is cumulative. That means it must be looked at whenever a rental contract is renewed or extended.
Do you have any UK rentals where the SDLT tax has not been assessed?
We offer an efficient, cost-effective SDLT compliance program whereby our clients leave the whole process to us. If you have any doubt whatever that you have this tax covered, I do recommend that you reach out to us before the taxman comes knocking on your door. Use this contact form if you’d like to connect with us.
We have been working with Saunders 1865 for a long-time now when we need to find accommodation for our Corporate team members when they are on temporary assignment here in the UK. But their Stamp Duty Land Tax (SDLT) programme has been invaluable in ensuring compliance with the HMRC regulations associated with long-term rental agreements.
Phil Knowles, London