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Apr 12 2019

What is changing with the new tax year?


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As 2018-19 is now in the rear-view mirror, changes are coming for the new tax year. There's some good news for most people – as the lower threshold for income tax has been raised to £12,500, and the higher rate threshold has increased to £50,000. In real terms this could mean savings of around £130 a year for those on basic rate, whilst for those on a higher rate this equates to a saving of £860.

Significantly, 2019 marks the start of the third phase of withdrawal of mortgage interest as an allowable expense. In their 2018/19 return, half of mortgage interest payments can be deducted as an allowance for landlords, while the half remaining is subject to tax relief at 20%.

This month sees a big shake up to the Energy Efficiency Regulations of 2015, and now landlords will be required to contribute up to £3,500 per property to achieve a minimum EPC rating of E, as part of the new Minimum Energy Efficiency Standards.

The Chancellor's Spring Statement highlighted a new focus on future proofing new-build homes with low carbon heating – a major note is the banning of gas boilers in new homes by 2025.

According to the guidance, where the costs of improvement to properties exceeds £3,500, the expectation is that landlords will “install all measures which can be installed at up to £3,500, then register an exemption”. This exemption will last five years, at which point landlords will be required to make another attempt at improving to the minimum level of energy efficiency.

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