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Interesting read..
As we've carried out research for member defence cases here at ACORN Cardiff, we've also learned a lot about the entirely legal routes landlords take to avoid paying tax. https://www.vice.com/en_us/article/akzqzp/uk-landlords-dodging-an-estimated-pound173-billion-in-tax
As we've carried out research for member defence cases here at ACORN Cardiff, we've also learned a lot about the entirely legal routes landlords take to avoid paying tax. https://www.vice.com/en_us/article/akzqzp/uk-landlords-dodging-an-estimated-pound173-billion-in-tax
A common practice is registering a shell company (A company that only exists on paper) and purchasing properties as that 'company'.
This means that the landlord, instead of paying the normal tax rate for high earners (40% for those who make between £50,001 - 150,000), can instead pay the corporation tax rate of 19%.
Comparatively, the income tax rate for people who earn between £12,501 - £50,000 is 20%, so landlords very often pay less tax on their income than someone making minimum wage does.
Again, this is an entirely legal and extremely commonplace practice. 64% of landlords that own 4 or more properties will take this route; 44% of landlords overall (from Simply Business).
