Last week our managing director did a general fact sheet to help landlords. We are now going to go into some more details in relation to schemes that can help tenants and landlords.
We have found over the last few weeks that a lot of tenants are not aware of what they are entitled to claim. We have had to point out to them the arears that will be able to help them. We made it very clear that communication is absolutely necessary with tenants, but it is also important to try and help them by sending either links or explaining what they need to do to make a claim.
If you are discussing with tenants the situation on rents we also find it helpful if the tenants give you full financial disclosure. You are then you are able to learn whether you wish to reduce the rent or not depending on their own financial circumstances. Communication is key, but also everybody being honest with the situation and full disclosure helps everybody see what the problem is.
To understand what universal credit is you need to understand the history. There are a lot of benefits in the past that were put into different groups and the government decided that they should put all claims under one heading called universal credit. This does not necessarily mean that they cannot claim for housing within universal credit itself.
How can people claim Universal Credit?
If a tenant has lost their job or are working reduced hours they may be able to claim the following;
- Universal credit
- New style job seekers allowance
- New style employment and support allowance
- Employment and support allowance
How is Universal Credit calculated?
You may be able to obtain universal credit if;
- You are on a low income or out of work
- You are 18 or over
- You are at a state pension age
- You and you partner earn £16k of less between you
- You live in the United Kingdom
There is a benefits calculator that can be used. We enclose the link below to the government that helps the tenant to calculate if they would be entitled to it.
What will happen on the following;
If you live with your partner?
Your partner’s income and savings will be taken into account, even if they are not eligible for universal credit.
If you are 18 or over and in training or studying full time?
You can make a universal credit claim if any of the following apply;
- You live with your partner and they are eligible for universal credit
- You are responsible for a child, either as a single person or a couple
- You are disabled and are entitled to disability living allowance or personal independence payment and have limited capacity for work
- If you are in further education or 21 and under and do not have parental support, for example estranged from you parents, and you are not under local authority care. There are separate rules for 16 and 17 year olds.
What if I am studying full time?
You can also claim if you are in full time further education if any of the following apply;
- You do not have parental support
- You have limited capacity for work and are entitled to personal independence payment
- You are responsible for a child
- You are a couple responsible for a child and you partner is eligible for universal credit
You can apply for universal credit by following the following link;
Can tenants obtain money for their housing?
Yes, from April the local housing allowance rates have been increased to the 30th percentile of market rent. This applied for all private renters who are new universal credit claimants, or have an existing universal credit claim that includes a housing element and also to existing housing benefit claimants.
How will this help with my housing?
If you or your partner are responsible for paying the rent for the home you live in. Or if you have a mortgage, universal credit may provide help toward the cost. This is called universal credit housing cost.
How do I make a claim for housing costs?
When you make a new claim for universal credit your housing cost will usually be paid as part of the universal credit payment. If you are receiving housing benefit, the department for work and pensions will contact your local authority to stop you housing benefit payments. At this point you will receive an additional payment of 2 weeks’ worth of housing benefit to support you as you move to universal credit.
What information will they need to make a claim?
If you are applying for housing costs for rented property as part of your universal credit claim, you will need to bring evidence of how much your rent is to make a new claim. This could be a current tenancy agreement, a current rent statement, a current rent book or a signed letter from you landlord. You should make sure that as a landlord these documents are fully available for them.
If I have a mortgage can I claim universal credit?
Yes if you have a mortgage, universal credit may provide help towards the cost of your mortgage payment. It may also be able to help loans up to £200k you have taken out that use your property as security.
To get this loan you need to provide, a mortgage agreement, a current mortgage statement, a loan agreement and bank statements showing the payment of the mortgage or loan. Help with mortgage payments or loans is provided as a loan you must be aware of this. You will only be asked to pay this loan back if the property was claimed for as sold or transferred to someone else. So it is important that you consider this.
If I’m self-employed am I still entitled to claim universal credit? Will this include my housing cost?
We have outlined about that universal credit can also include payments toward housing cost. You are able to claim universal credit as a self-employed person providing you meet the usual eligibility criteria. Support has been given by the government and allows you to follow government guidelines on self-isolation and self-distancing. They have now relaxed the minimum floor for self-employed people. This applied to all universal claimants and will last for the duration of the outbreak.
I have been put on Furlough so I am assuming I can’t apply for universal credit?
This is not correct, there is no reason why you cannot also apply for universal credit, and you should make an immediate application. These are being processed as quickly as is possible so it may be able to help you very soon.
My tenants have been put on furlough but still cannot make up the balance?
Do your tenants know that they can work for someone else why they are on Furlough? If their contract allows then they are entitled to work for anyone else and this will not affect their grant under the scheme. They would always need to check with their employer first.
How much is Furlough?
Furlough is 80% up to £2,500 per month and it is down to the employer on whether they put staff on Furlough and make up any balance. You will have to check with your tenants exactly what the amount they are receiving is. As we have said before an employer’s decision to make.
When will Furlough end?
At this moment in time Furlough has been extended to the end of June. It is however difficult to know whether this will be extended beyond this. We are all hoping that the pandemic will stop at some point but you never know.
If they are a company director and pay themselves PAYE i.e. the personal allowance per annum, are the entitled to Furlough themselves?
Salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duty to their company which is set out within the company’s act 2016. Where a company can consider it is in compliance with the statutory duty of one of more of its individual salaried directors. The board can decide as such, directors should be furloughed.
Where Furloughed directors need to carry out particular duties to fulfil statutory obligations they owe to their company. They may do so providing they don’t do more than judged reasonably necessary. For example, they should not work on anything they would normally to generate commercial revenue or provide services to or on behalf of the company.
We often find with the item above that people don’t understand this and therefore they don’t apply for it. It can be backdated to the 1st March and there is simple documentation to do this online.
My tenants are self-employed and are waiting until June? Is there anything that I can do?
We have already laid out above that universal credit can be claimed by the self-employed. This includes some form or housing costs. The amount depends on the local housing allowance which can be found on any local authority website.
The government have put a scheme in place to allow the self-employed to money.
This scheme will allow them to claim a taxable grant of 80% of their average monthly trading profit. It will be paid out in a single instalment covering 3 months, and capped at £7500 altogether. It is a temporary scheme but maybe extended.
If they receive the grant they can continue to work, start a new trade or take on other employment including voluntary work or duties as an arm forced reservist.
The grant will be subject to normal income tax and self-employed nation insurance.
Who can claim?
Any self-employed individual or member or a partnership and;
- Has a trade which has been affected by coronavirus
- You traded in the tax year 2018/2019 and summited your self-assessment tax return on or before 23rd April 2020 for that year
- You traded in the tax year 2019/2020
- You intend to continue the trade in the tax year 2020/2021
To work our eligibility they will first look at the 2018/2019 self-assessment tax return. Trading profits must be no more than £50k and at least equal to the non-trading income.
If they are not eligible based on the 2018 self-assessment tax return, they will then look for tax years 2016/2017, 2017/2018 and 2018/2019.
How will they work this figure out?
HMRC will assess if they are eligible for the grant based on their trading profits and non-trading income on their self-assessment tax returns. There is a guide that they can use that will be able to help them work it out. The link is below.
How will they claim?
The online service they will use to claim is not yet available. HMRC will aim to contact them by mid-May if they are eligible and invite them to claim using the government online service. Payments should be made very early in June 2020 if the claim is approved.
When they claim what will they need?
- They will need the self-assessment unique tax reference (UTR) number
- Nation insurance number
- Government gateway user ID and password
- Bank account number and sort code they will want the grant paid into
They will have to confirm to the HMRC that their business has been adversely affected by coronavirus.
What happens after they have claimed?
Once they have summited the claim, it should tell them straight away whether the grant in approved. They will pay the grant into the bank account provided within 6 working days.
I understand they run a business and say that they have no help, what other things can they claim for?
Along with universal credit that we have already laid out they can claim for;
- Defer or self-assessment of income tax and VAT payments
- Grants for businesses that pay little or no business rates
- Business interruption loan scheme
- Bounce back loans
We will outline in part 3 of these tips the other schemes that are available.
We have already stated that communication is absolutely key when talking to tenants. We have found a lot of tenants have not applied for grants that they are fully entitled to and are non-repayable.