Landlords and tenants: the government measures to support landlords and tenants during the Coronavirus crisis.
Grant Funding
- The Small Business Grant Fund (SBGF) provides grant funding for businesses eligible for Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR).
- The Retail, Hospitality and Leisure Grant (RHLG) is provided to businesses in England in receipt of the rates Expanded Retail Discount with a rateable value of less than £51,000.
- A Discretionary Grant Fund was available for small and micro-businesses that are adversely affected by the Coronavirus and are not eligible for other grant schemes. Applications had to be made by 9 am on 15 June 2020.
- A similar Discretionary Grant Fund was announced in January 2021.
See COVID-19: Grant Funding for business
Self-Employment Income Support Scheme
- General property landlords are unable to claim under the COVID-19 Self-Employment Income Support Scheme (SEISS) in respect of lost rental income: rental income is investment income and not a self-employment trade.
- Conversely, Furnished Holiday Letting (FHL) is specifically treated as a trading activity for Income Tax, Corporation Tax and Capital Gains Tax (CGT) purposes.
- Where an FHL business involves the provision of extra services, it may be reporting its profits as a trade and have used the self-employed pages of the Self Assessment return or partnership return. In the case where a holiday trade exists, it may be possible to claim support under the SEISS.
- The majority of FHLs who report their profits in the Land and Property section of the return are unable to make a claim under the SEISS.
See COVID-19: Self-Employment Income Support Scheme
Coronavirus Job Retention Scheme
- Landlords with employees may need to lay off some of their staff or directors during the crisis.
- For claim periods running between 1 November 2020 and 30 April 2021, employers can claim 80% of an employee's usual salary for hours not worked, up to a maximum of £2,500 per month, under the Coronavirus Job Retention Scheme.
- A sole director company landlord may furlough the director in respect of their employment duties.
See COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020
Deferral of Income Tax payments
- Landlords who pay Income Tax under Self Assessment could delay making their second payment on account for 2019-20, which was usually due by 31 July 2020.
- Landlords choosing to delay payment will have up to 31 January 2021 to pay.
See COVID 19: Deferring Income Tax payments
Business taxes: Time to Pay
- All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
- These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
- It is essential to contact HMRC and make a Time To Pay agreement before the tax debt becomes due.
Empty property and business rates relief
- Under the government's existing rates relief policy, landlords do not have to pay business rates on empty buildings for three months.
- The Expanded Retail Discount scheme gives local authorities discretion to allow a business rate holiday to retail, hospitality, leisure and child nursery businesses.
Furnished Holiday Lets (FHLs)
- FHLs may not meet the required occupancy conditions for the 2020-21 tax year, in which case the period of grace rules may provide relief.
- HMRC have confirmed that for the 2020-21 tax year unforeseen circumstances for the purpose of a period of grace election include where the letting condition is not met due to Coronavirus measures such as enforced closure due to lockdown or travel ban.
CGT: Soft landing on penalties under a new 30-day reporting regime (now expired)
- HMRC announced that they would not charge any penalties for failure to report Capital Gains Tax on UK residential property within the new 30-day deadline until after July 2020.
See: Change to new CGT reporting
Ban on evictions
Private or social accommodation
- Up until 31 May 2021 landlords were not be able to start proceedings to evict tenants for at least a six-month period (extended from three months on 5/6/2020 and 5 months on 21/8/2020).
- Landlords whose tenants are experiencing financial difficulties due to Coronavirus will receive a six-month mortgage payment holiday (extended from three months on 5/6/2020). Applications are open until 31 March 2021.
- At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
- From 21 August 2020 to 31 May 2021 landlords had to give renters a notice period of at least six months. The exception to this was where there was anti-social behaviour and in cases of domestic abuse. From 1 June 2021, notice periods had to be at least 4 months in most cases. From 1 August 2021, the notice period for cases where there are less than 4 months of unpaid rent will reduce to 2 months’ notice. Notice periods for the most serious casesare lower with most requiring 2 or 4 weeks’ notice. The notice period for ‘serious arrears’ is 4 weeks’ notice and the threshold for what constitutes ‘serious arrears’ is ‘arrears equivalent to 4 or more months’ rent.
Commercial tenants
- The Coronavirus Bill provides that no business will be forced out of their premises if they miss a rent payment in the six months to 30 September 2020. On 16 September 2020, the government announced an extension to the ban on evictions of commercial tenants to 31 December 2020, with a further extension to 31 March 2021 announced on 9 December 2020. On 16 June 2021 this was further extended to 31 March 2022.
- All commercial tenants in England, Wales and Northern Ireland are eligible.
See Press Release: Complete ban on evictions and additional protection for renters
Making Tax Digital (MTD) for Income Tax
- It was originally proposed that this new tax accounting system would commence in April 2020.
- It is now postponed until at least 2023. In the meantime, HMRC's MTD for Income Tax pilot scheme is up and running and this may be an ideal time to try it out and get your systems in place.
See Making Tax Digital Tracker
Useful guides on this topic
COVID-19: Government support tracker
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.
COVID-19: Employer support tracker
An index to our Employer support pages covering support and relaxations available to employers during the Coronavirus pandemic.