Do landlords trading through a limited company need to be in redress scheme

[richardsheppard]

I am a landlord with 15 properties, we set up a limited company to manage the letting out and management of these properties so that ASTs are in a company name and all rents are paid to the company. The new legislation requiring letting agents and property managers to be part of a redress scheme goes on to say:

 

Does the requirement apply to landlords?

Landlords are not explicitly excluded from the requirement but are not generally caught by the definitions given above as they are not acting on instructions from another party.

 

As our company only 'manages' our own properties then we assume that we do not require to be part of the redress scheme, this is made on the basis that we are not taking instructions from another party.

 

Do you agree?

[Tim Wragby]

Good question!

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/361556/Lettings_Agents_and_Property_Managers_redress_scheme_leaflet.pdf

 

is the brochure provided by the DCLG which goes to explain the requirements but your situation may require either a direct question to the DCLG or if you are a member of the NLA (National Landlords Assoc) or RLA (Residential Landlords Assoc) you may get an answer from their legal beagles.  I guess it may turn on whether,as a Ltd company, you are seen to be different to a landlord effectively acting as a sole trader and operating in solely in their own right.

 

I think you are correct but it may be worth getting some legal advice, if only to prove it.  At least the cost will be tax deductible 

[The EP Investor]

I would have thought you are using the company as an entirely separate entity for tax reasons - so you are arguing with HMRC that you aren't a sole trader and the income of the company is not personal income. I.e. the Ltd Co is an entity in it's own right, and you are independent of it. 

 

To then try and argue that your company isn't taking instruction from another party, because you are the only person issuing the instructions.... there is the risk they would say your company is therefore not acting as a separate entity and therefore you are trading as a sole trader, and will be taxed as such. 

 

But I'm not an accountant, so I've no idea what I'm talking about. Just applying logic as far as I can see it, which as we all know often doesn't apply to the workings of the law.