• Average House Price: 9 June £297,508 August £304,116 – Zoopla
• More FTB Mortgages issued in June since 2007
• First time buyers make up 47% of the market in Q1 2016 – 154,200 Deposit is £33.960 up 14%.
• BTL arrears falling after Brexit 9,300 Q1 2016 to 6,600 in Q4
Top Buy to LetMortgages
• TMW: 2.49% 2 Year Fix 75% LTV
• B Mids: 2.84% 2 Year Fix 75% LTV
• KENT REL: 4.99% 2 Year Fix to 85% LTV
• VIRGIN: 2.54% 2 Year Fix 75% LTV
• MORT TRUST: 2.80% 31/01/18 75% LTV
• COVENTRY: 3.29% 2 Year Fix 75% LTV
Top Long Term BTL
• BMSols: 3.29% 5 Year Fix 75% LTV
• VIRGIN: 3.48% 5 Year Fix 75% LTV
• Coventry: 3.19% 5 Year Fix 65% LTV
BRIDGING & DEVELOPMENT
• Typical 70-75% LTV x Purchase Price
• Arrangement Fees 2%
• Monthly Interest from 1%
50% x GDV
100% x Build Cost in Stages
50-60% x Purchase Price
Please contact Rory to discuss the information in this blog.
When you carryout out a refurbishment or Fit Out of your business premises you will be entitled to Capital Allowances.
Here is quick summary of the main types of allowance.
Business Premises Renovation Allowances
BPRA gives incentives to bring back into business use derelict or business properties that have been unused for at least one year. It gives an allowance of 100% for certain expenditure you incur when converting or renovating unused business premises in a disadvantaged area.
BPRA started on 11 April 2007 and ends on:
• 31 March 2017 for Corporation Tax
• 5 April 2017 for Income Tax
To qualify for BPRA, you must incur qualifying expenditure.
Qualifying expenditure is capital expenditure you incurred when you:
• convert a qualifying building into qualifying business premises
• renovate a qualifying building that is, or will be, a qualifying business premises
• repair qualifying business premises
Integral features are:
• lifts, escalators and moving walkways
• space and water heating systems
• air-conditioning and air cooling systems
• hot and cold water systems (but not toilet and kitchen facilities)
• electrical systems, including lighting systems
• external solar shading
You can claim for fixtures, eg:
• fitted kitchens
• bathroom suites
• fire alarm and CCTV systems
You can claim if you rent or own the building, but only the person who bought the item can claim.
Annual Investment Allowance
The Allowance is set at up to £200,000 from January 2016
You can only claim AIA in the period you bought the item.
The date you bought it is:
• when you signed the contract, if payment is due within less than 4 months
• when payment’s due, if it’s due more than 4 months later
If you buy something under a hire purchase contract you can claim for the payments you haven’t made yet when you start using the item. You can’t claim on the interest payments.
If you don’t want to claim the full cost, eg you have low profits, you can claim part of the cost as AIA and part using writing down allowances. You can do this at any time as long as you still own the item.
If your business closes, you can’t claim AIA for items bought in the final accounting period.
Enhanced Capital Allowance
100% capital allowances can be obtained for expenditure on environmentally beneficial technology. This enables businesses to write off the whole capital cost against their profits in the year in which the expenditure is incurred and therefore to obtain valuable tax relief which can improve cashflow.
What doesn’t count as plant and machinery
You can’t claim capital allowances on:
• things you lease – you must own them
• buildings, including doors, gates, shutters, mains water and gas systems
• land and structures, eg bridges, roads, docks
• items used only for business entertainment, eg a yacht or karaoke machine
New Tenant – Lease Incentives
New Tenants may get incentives such as rent free periods or reverse premiums. The new accounting rules (FRS102) mean that these incentives are spread over the life of the lease not taken over the period to the first rent review. Spreading these savings out will mean that tenants get a tax advantage as the gain will be less at the beginning of their lease.
Fit Out Finance
Generally funding fit outs is an issue due to the nature of the security.
As the name suggests, Fit-Out Finance is dedicated to funding fit-outs of business premises, including:
• Head Office.
• Fast food outlets.
• Restaurants/retail premises.
Using a blend of hire purchase, lease, unsecured loan and other facilities where appropriate, we are able to fund not just the tangibles, but all manner of tertiary work, from survey through to painting and plumbing.
As previously noted HP and Loans are suitable for tax relief through Capital Allowances.
Here are a couple of examples of how funding can work.
Start Up Fast Food Outlet
Well researched & professional, our client was buying into a well-respected fast food franchise.
Their bank had supported the franchise purchase, but there was a further £75,000 required to fit the premises to franchisor specification.
With the customer’s background and a solid franchise, arranging leasing on equipment was fairly straight forward.
That left a £30,000 shortfall on less tangible works – as there were 2 owners in the business, we were able to secure Start-Up loans to fund the shortfall
The client was a well established, profitable hirer of electrical equipment. Despite being profitable, the business was highly seasonal and therefore cashflow fluctuated wildly.
Most of their funding was done under their roof, being shared between the bank, and the bank’s own finance company, who handled their hire stock.
However, when they approached the finance company, they were confidently informed that racking and mezzanine floors couldn’t be financed; hence they ploughed on, pouring valuable cash into fixed assets.
They had spent over £100,000 on racking etc and were struggling with cashflow to complete the project.
The Funder was able to:
• Release the full value of the assets they had paid for.
• Provide ongoing further funding for a mixed bundle of assets, ranging from a mezzanine floor to bikes used to move around the facility efficiently.
• Provide a £35K term loan to cover intangible costs.
A grant is an amount of money given to an individual or business for a specific project or purpose.
You can apply for a grant from the government, the European Union, local councils and charities.
you won’t have to pay a grant back or pay interest on it
you won’t lose any control over your business
Financial assistance in the form of grants is subject to the normal taxation rules, as supplemented by S105 Income Tax (Trading and Other Income) Act 2005 and S102 Corporation Tax Act 2009 (see BIM40465). Under normal rules the tax treatment of grants will depend on whether they are capital or revenue.
Grants which meet revenue expenditure, such as interest payable, are normally trading receipts.
See also Smart v Lincolnshire Sugar Co. Ltd  20TC643 and Burman v Thorn Domestic Appliances (Electrical) Ltd  55TC493.
Grants which meet capital expenditure are normally not trading receipts.
Grants that may be capital in nature include those paid to acquire capital assets or to facilitate the cessation of a trade or part of a trade.
See The Seaham Harbour Dock Co. v Crook  16TC333).
A capital grant reduces any qualifying capital expenditure for capital allowance purposes, see CA14100.
Finding ways to fund your business can be a challenge so hear are some business models where your customers provide the funding.
This can apply to many situations ranging from Networking and Memberships to Sky TV or Microsoft Office 365, get your clients hooked on paying a monthly or periodic payments and it should work wonders for your cash flow.
Any product in short supply creates a situation where clients are prepared to pay now in order not to miss out, here is an example:
Microsoft unveils its new Xbox One console Friday, one week after the release of the rival PlayStation 4.
Microsoft says the supply of the new $499 consoles is its biggest ever. But with record pre-orders — more than double those of the Xbox 360 back in November 2005 — the consoles may be hard to find.
Pay In Advance
Often used in the home improvement market for example conservatories, kitchens, bathrooms, getting customers to pay a deposit or in some cases all the money upfront (or on finance) puts you in the best possible position especially if you can set up accounts to pay your suppliers on 30 or 60 days.
Getting paid to bring people together is a great business model think of ebay, dating sites, or any on line market place where the owner gets paid when a deal is done.