And all the time they were making a complete mess of this big case they were sending blue frighteners and debt collectors to collect peanuts from small fry, introducing MTD for pensioners with £10k of rental income, and failing to put resources into answering the telephone quickly and competently. HMRC seems to delight in making ordinary people's lives miserable but they let the big fish swim free either by stitching up deals behind closed doors or failing to land them when they have the chance. I cannot put into polite words what I think of HMRC.
"Hopefully, instances of dishonest employees pinching money from their employers are few and far between."
Oh my word. Oh dear, oh dear.
I worked for the country's biggest chain of off-licences, and the biggest chain of CTNs. Huge turnover businesses, both of them. "Shrinkage" by way of shoplifting was negligible. Hardly worth bothering about. But theft by staff was a huge problem that required dedicated teams of internal auditors, stock-takers, and mystery shoppers. There were systems that alerted management quickly when a particular branch had the disease and thousands of pounds worth of resources would be thrown at the target ASAP and would continue to be thrown until a camera or a marked fiver or some other device caught the thief. This was a routine occurrence.
I remember being told by a business transfer agent from whom we used to buy sole-trader businesses that when the figures for a prospective sale didn't stack up he would ask the seller about his staff. At the end of the list would be Jenny or Dave, 'longest serving employee, family friend, would trust them with my life'. "That's always the one", said the business transfer agent.
Most people are honest. But temptation is a sin we are all susceptible to and every business should have systems in place that prevent staff from stealing, so the staff don't have to fight temptation.
It's fair comment. As I said in my post above it is taking a long time for existing landlords to make the decision to sell up. But in England there is already a reduced supply of new rental properties - the stock is now static - in our area it is declining slowly. It will be interesting to see statistics on that for both Scotland and England in the next couple of years.
Very good points.
Any thoughts about second homes? Is there any way of avoiding the ghost town effect in places like Polruan without actually confiscating private property?
The consequence of the tax changes described in the article is exactly as I expected. I thought that nothing would happen until landlords saw the figures in their self-assessments. Therefore from 2015 to quite recently the majority of private landlords were either ignorant of what is coming or were crossing their fingers and hoping for the best. When, as usual, this didn't happen a trickle of disposals began and that is continuing now at a somewhat faster pace. Today I received my weekly notification from RightMove of houses available to let in our area. This is the fourth consecutive week when there are no new lettings offered in our town. Not a single one. There is a grand total of 5 properties to let spread across an area with a population of 75,000. Of those 5 only one is new on the market this week. Asking rents have risen.
And then there's the abolition of s21 of the Housing Act 1988. I know that accountants are not property lawyers or IFAs but I really do think they should be drawing their landlord clients' attention not only to the tax changes but also to the abolition of s21. This will trap landlords because they will be unable to sell with vacant possession and who knows what the market will be like for properties with sitting tenants. That market isn't strong now but if rent controls are the next thing to happen it could be very weak indeed. You cannot rule out the possibility that private landlords will be utterly trapped in unprofitable investments from which they cannot escape without a significant loss of capital, and if they have only a small amount of equity they could face crippling losses.
I saw at first hand what the private residential letting market was like from the 1960s to 1988 - it was awful and there was no new investment. The 1988 Act was motivated by a political decision to increase the supply and it had that effect. We are now going into reverse.
The risk profile of residential property investment has changed completely and, as I expected, many landlords are proving very slow to appreciate the consequences. I hope their professional advisers are up to the task of warning them what has already happened, what is happening now, and the risk of what might happen in the future.
In all this I make no value judgements. This post is not political. I merely advise that landlords should study history a little and make decisions based on a proper assessment of what the future holds.
So why do I sometimes meet resistance when I ask for a proper cash flow statement to be included in monthly management and annual reports?
"Nobody ever went bust while they had cash in the bank"
"Profits are vanity, cash is sanity"
"Cash is King"
"Profits are very nice but it's cash that pays the bills"
... and so on
And another thing. It takes ages to get a meal in a restaurant. That's fine if you want to spend your time that way. But if time is precious it's much quicker to order a home delivery of a meal and "Just eat" it when it arrives.
I wonder whether there might be some serious problems in the multiple restaurant and multiple retailer sectors - problems which go beyond the usual complaints about online shopping, minimum wage levels, and business rates.
I am involved in a market hall. We achieved 93% occupancy in our most recent financial year. Most voids were when stalls changed hands because of ill health or retirement. Some of our traders actually admitted they had a good Christmas (traders don't often talk about success). We subscribe to a campaign called Totally Locally. Our Farmers Market and Street Food events are going great guns.
Is it possible that there is a real measurable shift away from multiple outlets and towards independent traders? I hope so. I'm not yet convinced, but it does seem to be a possibility. If so we are going to see a lot of mediocre multiple operators failing, not just restaurants but shops and other businesses too.
I am thinking of joining the Wholly Agnostic Order of Epicurean Hedonists whose Articles of Faith exclude the use of electronic communications and records.
Surely not? We are customers of HMRC. And any organisation which is customer-facing has as its maxim 'The customer is always right'. No organisation would create a needlessly complicated system to annoy its customers.