The best thing we can do for a client worried about their taxation situation is to point them in the direction of a good tax advisor.
By Emma Coffey, head of sales at Goldsmith Williams Solicitors
As a property professional, I would not give someone advice on how to cure a medical ailment. That is the job of a doctor. Similarly, you won’t find me fixing a client’s broken-down vehicle when I could simply phone a mechanic, who is trained in this specific area.
It’s common sense, right? We provide advice on matters we are qualified in.
What happens though, when the boundaries start to overlap?
Take lenders and brokers, for instance.
Lenders and brokers are vital to mortgage proceedings. The country’s booming buy-to-let market would be lost without their skill and expertise.
An integral part of this market, of course, is taxation.
Landlords make an income off the properties they rent-out, meaning they need to declare these earnings accurately, just like we do with income paid from an employer.
As we all will have heard by now, upcoming regulatory changes could soon place landlords under scrutiny in this regard. In 2017, the Prudential Regulation Authority will require buy-to-let lenders to apply stricter underwriting standards that may reduce the amount some landlords are able to borrow. As a result, landlords are being warned that they must make sure their tax affairs are in order as any discrepancy between the income they declare to HMRC and that they declare to their mortgage lender is likely to be spotted as part of the tougher affordability checks that are coming into force.
Naturally, as us property professionals try to ease the concern that may be felt by many landlords, we may feel tempted to provide clients with bits and pieces of tax advice we may have picked up along the way.
I cannot reinforce enough the sentiment that has been expressed by the likes of Roger Morris at Precise Mortgages and Liz Syms, chief executive of Connect for Intermediaries in the past week.
It is simply not our jobs to provide tax advice.
To maintain the credibility of our industry and profession, it is more vital than ever that we stick to what we know, and are qualified in, and leave the tax talk to taxation advisors.
The best thing we can do for a client worried about their taxation situation is to point them in the direction of a good tax advisor.
