Have you ever wondered how much you are paying in income tax as a landlord? How do you think it compares to the tax paid by a giant retailer such as Tesco supermarkets?
According to research cited by Landlord News on the 13th of March, private sector landlords are together paying more than double the income tax paid by Tesco in any one year.
In a study conducted by the National Landlords’ Association (NLA), it was discovered that landlords pay an average of £1,668 each in income tax – a grand total for all landlords of some £3.8 billion. And that is before additional taxes such as Stamp Duty and its 3% surcharge, VAT, and Capital Gains Tax are even taken into account.
Contrast this with the £1.63 billion in tax paid by the supermarket giant Tesco PLC in 2018 – only a half of the amount paid by UK landlords. For an even starker contrast, the NLA quotes the example of Amazon’s UK tax bill, which is a minuscule 62 times smaller than that paid by the country’s landlords.
The NLA quotes its findings to scotch the belief held in some quarters that private landlords are somehow subsidised from public coffers. In future years, when the removal of landlords’ previous qualification for tax relief on mortgage interest repayments takes full effect, their contribution to the public treasury is likely to rise by a further £2 billion – taking the amount paid by all private sector landlords to some £5.7 billion.
Mounting tax liabilities have made it increasingly impossible for landlords to make a reasonable return on their buy to let investments, leading many of them to sell up and quit the market, concludes the NLA.