Landlords will be used to wearing many hats. They are landlords, but are also expected to perform other duties. Behave like charities when their tenants decide to use the rent for other purposes, living rent free in many cases; be marriage guidance counsellors when relationships break-down; be on call for repairs, both minor and major, day and night; be administrators, helping their tenants with the paperwork of claiming benefits; then expected to explain the correspondence the tenant receives.
This, many of them accept as part of the duties of being a landlord.
Many baulked when they were expected to become Immigration or border officials when the Right to Rent checks were introduced with heavy penalties where someone without the Right to Rent was given a tenancy.
How many more duties can a landlord be held responsible for? Surely nothing else was possible………Wrong!
A consultation is underway, to close on 12th May 2017, on proposals to tackle tobacco duty evasion with the private sector landlord being the main target of any changes that are introduced. An informal consultation has already been carried out, and several respondents felt an answer was to impose a duty of care on landlords, where evasion was discovered.
It would be interesting to know whether these respondents in favour of additional duties on landlords belonged to the private sector.
The main proposals are that:
Landlords and landlord associations should voluntarily add a clause to their tenancy agreements that illicit tobacco, alcohol and other items which are being traded, illegally, to avoid tax evasion.
New legislation be introduced to impose a duty of care on landlords to ensure their tenants are not involved in tobacco or other excise duty fraud and that their properties are not being used to evade duty, with, you guessed it, civil penalties for landlords where this duty is not complied with.
So, landlords along with their duties to inspect for repairs, are now expected to look for cases of cigarettes. What is to stop a tenant lying, stating that the cigarettes are for personal use? They have more than they legally should have? Why, none of the neighbours, nor family members smoke, so they bring the legal allowance back for them.
How can a landlord disprove whatever they are told? It would have to be blatant indeed for a landlord to be certain that he was in the presence of a tax evader.
How would this legislation apply to a social tenant – as likely, if not more so, to engage in a little illicit trading in something as innocuous as cigarettes?
What scale of fraud are we talking about? Are the penalties the same for someone who brings back the legal limit but sells them to make a few pounds, as for the large-scale trader, selling hundreds of cigarettes to a small shop or club?
It seems that a defence would be allowed, if landlords have taken reasonable steps to guard against this: If the tenancy agreement allows that the tenancy can be terminated if there is illicit tobacco or other excise activity and the landlord evicts anyone who is found to be violating these provisions. No second chances there then.
There is also a defence if landlords conduct periodic checks on the premises – how thorough does this need to be to guard against penalties? Are landlords required to look under beds?
It is worth looking at the HMRC: Open consultation: Sanctions to tackle tobacco duty evasion and other excise duty evasion as the consultation will ask what reasonable steps landlords could take to address the subject of illegal trading in their properties and possible sanctions that HMRC should impose on those landlords that have not taken sufficient checks to stop this trade.
Landlords, welcome to the world of Customs and Revenue. Yet another task, for which you will not be paid. No change there then.
For advice on buy to let issues – Ask Sharon