Need expert tax advice on how to manage your BTL?
Unfortunately I can’t help you – never have been able to, never will be able to.
But never have I felt so compelled to urge fellow landlords to only use suitably qualified tax accountants to manage their tax dodging optimising affairs. Due diligence is paramount.
I’ve been prompted to ring the village bell to call for this community assembly after a good old fashioned schoolyard fist-fight broke out – over landlord tax, of all things. It’s been an absolute bloodbath so far, with calculators and monocles flying all over the place.
Ladies, gents, and non-binary friends, we have a situation on our hands.
Dan Neidle, of Tax Policy Associates, a seemingly highly reputable tax-lawyer-chap, with qualifications and experience seeping out of his gills, has given us all a brutal reminder of why it’s imperative to choose our landlord/property tax advisors and experts wisely.
Tax Policy Associates Vs Property118 / Cotswold Barristers
Last week Dan Neide published a scathing article to add to Tax Policy Associates’ library of investigations, against prominent property forum Property118.com and their legal partner Cotswold Barristers, accusing their landlord tax planning service (which includes helping landlords restructure their business to lesson the blow of Section 24) to be, I quote,
“possibly the worst tax avoidance scheme ever”
FUUUUURCK ME! Savage!
Is it just me, or is there something very demeaning and amusing about someone referring to an entity as an “outfit” in this context? I might start calling my wretched children outfits when they misbehave.
In any case, that’s about as scathing as it gets, innit? Well, other than dobbing them into mother to boot.
Oh, wait, apparently they did that, too…
We’re writing to the Bar Standards Board to see if they can cast any light on these issues. We are also asking them to look into the wider question of why Cotswold Barristers are giving legal and tax advice that is obviously wrong.
Yikes!
Dan shares his thoughts in detail, which is essentially a technical and surgical dismantling of the S24 landlord tax planning solution being touted, explaining why he believes the “scheme fails spectacularly”, resulting in clients paying much more tax than is saved and also likely defaulting the mortgage.
In short, “the structure doesn’t work”, and he even refers to a segment of their strategy, which is explained in a video presentation, as gobbledygook! LOL.
There is also some concerning information raised regarding the head honcho of Cotswold Barristers being suspended for a month by the Bar Standards Board for acting negligently and “failing to act with reasonable competence“
There’s quite a lot to take in – none of which is positive.
Property118 and their partner Cotswold Barristers have issued a response refuting the allegations, claiming “None of the detriments forecast in Dan Neidle’s article has ever come to pass across this significant body of casework.”, but Dan appeared less than inspired by their defence.
Dan/Tax Policy Associates have also stated that they are sceptical that a full disclosure of Property118’s tax planning strategy has ever been made to HMRC, so again, they don’t seem won over by the defence Cotswold Barristers provided, in that “their approach has been accepted by HMRC and other accounting firms”.
There is suggestions that a Zoom call was being arranged between both parties to discuss matters, but for one reason or another it never came to fruition, and ultimately the situation was left with Property118 failing to respond to any of the technical questions that were asked, according to Dan.
The final response from Cotswold Barristers – and to add to the, err… excitement(?) – is what Dan described as a vague legal threat: “Your continued blackmail is noted and our response to any damages caused to our businesses by your future actions will be dealt with accordingly.”
Hahah, brilliant. And that’s exactly the kinda’ no holds barred, potty-mouthed, fight-talk we expect from squabbling lawyers.
All correspondence between both parties has been made publicly available in Dan’s blog post for your viewing pleasure, so you can make your own assessment of the situation.
Needless to say, I’m not qualified to make any judgments – I don’t know which party is technically in the right or wrong. I’m just the shameless industry gossip columnist, knocking back the vino, and dishing out the sauce.
We certainly can speculate though. No matter which way you slice it, the situation doesn’t look great.
HOOOOOOOW MUCH (for a tax service without tax qualifications)?!?
In the detailed assault report, a couple of points did initially surprise me, and then I ultimately found them hilarious (but that may have been the Sauvignon Blanc kicking in):
- Property118 is an unregulated adviser which works in a joint venture with a barristers chambers called Cotswold Barristers. But neither Property118 nor Cotswold Barristers appear to have any members or employees with tax qualifications.
- Property118 and Cotswold Barristers often charge fees of over £40,000 to relatively small landlords earning less than £100k/year.
Uhm, EXCUSE ME, WHAT? Say it ain’t so!
*takes a gigantic swig of the cheap, nasty-arse wine*
I think it’s fair to say the tax planning gig is a lucrative endeavour for Property118, and that seems to be supported by the clear push towards their tax planning services everywhere you turn on their website. Apparently they also run an affiliate program, which offers their affiliate partners a reward to the tune of £2,000 for every new client they introduce. That alone should help signify the profit margins we’re talking about here.
If that is indeed the case, I’m officially peeved off, to be quite frank, ‘cause they never once approached me to market their crafty tax solutions to you. What am I, chopped liver? Do they even realise how far my reach is? I have subscribers living in mud huts in the darkest depths of Papua New Guinea.
For a sweet £2,000 referral reward I would have rammed their services down your gullet like my life depended on it.
You: “Hey Landlord, thanks for the info, bro, but I don’t think this tax planning service is for me.”
Me: “SHUT UP AND BUY IT”
You: “But I don’t think I need it, I only have one BTL”
Me: “That’s always been your problem: thinking! BUY IT!”
You: “But Dan Neidle of Tax Policy Associates said it’s possibly the worst tax avoidance scheme ever!”
Me: “DAN WHO OF WHERE? Actually, I don’t even give a rat’s arse, he can suck my pickled onions. BUY IT!”
I could have been their ultimate soldier! *sigh*
In all honesty, I have been pitched by other “expert landlord tax services” in the past, to be their affiliate partner in exchange for handsome rewards, but I’ve never been able to accept, simply because I don’t know enough about the subject matter in order to be able to verify exceptional service providers from the rest, and there’s too much on the line if I get it wrong. So I had to hard pass each time.
I am curious though, who dropped £40,000 on Property118’s tax planning services? Did you?
Moreover – and I have to ask – if you’re going to unload such an obscene amount on a specialist service, why wouldn’t you ensure you’re benefiting from expert advice from a dork of the highest order, with distinguished qualifications longer than my twig and berries, within the specific field? In this case, tax qualifications.
That’s not a swipe at Property118/Cotswold Barristers, but rather the consumer, and it’s actually just a general view on consumerism.
I don’t know, man, this kind of feels like splurging £1,000 on a Kobe beef fillet steak that’s prepared by the sous chef in the local Nags Head. Sure, they may have a general understanding of the culinary arts and be very competent with a spatula – and even provide a very satisfying service – but for that kind of doe you can roll up to a Michelin star steakhouse in a luxury Uber and walk away with some change. So it’s just a weird purchase, in my opinion.
Arguably, the local Nags Head shouldn’t be offering the Kobe fillet for that price but just as equally, the punters shouldn’t be buying it just because they do.
Tax Policy Associates advice for anyone that did purchase Property118’s tax planning service!
This actually sounds pretty, errrm, scary.
We would strongly suggest you seek advice from an independent tax professional, in particular a tax lawyer or an accountant who is a member of a regulated tax body (e.g. ACCA, ATT, CIOT, ICAEW, ICAS or STEP). Given the potential for a mortgage default, we would also suggest you urgently seek advice from a solicitor experienced with trusts and mortgages/real estate finance (e.g. a member of STEP).
We would advise against approaching Property118 given the obvious potential for a conflict of interest.
Ouch! That’s the last thing anyone wants to hear after dropping a small fortune on their service.
Of course, I don’t know if any of that is necessary – presumably Property118 believes it is not.
Either way, none of this is comforting or reassuring to hear, that’s for sure. Even if Property118 and Cotswold Barristers are offering sound tax services (which could be the case for all I know), there are too many red flags being raised by someone a lot smarter than me for my likings, least of all the hefty price-tag – something I’m still trying to wrap my noggin around. I’d personally be inclined to seek advice from an independent tax professional just to ensure everything is above board. But that’s just me.
Anyways, I’m going to sit back and watch how the situation unfolds.
In the meantime, I’d be interested to hear your thoughts on Dan’s blog post and this whole ordeal. Are you team Tax Policy Associates or Property118?
Where should landlords get expert tax advice from?
In the midst of all the drama, it did get me wondering (and now I’m finally getting to the actual point of my blog post – which will take one mere sentence to address), who should landlords feel confident in turning to for professional tax advice? This seems like a minefield.
That’s now the obvious question, right?
So who did I turn to? No other than Dan Neidle (via a Tweet), of course.
So basically, anyone reputable with an actual tax qualification?
Right, got it.
Sounds so obvious when you say it out loud.
If anything, this brawl has reinforced my belief in due diligence and always choosing the right people for the job, whoever that may be.
As a general thought on tax liability and acquiring expert advice…
I’ve always been under the belief that when anyone is trying to endorse a tax avoidance (or reduction) strategy that isn’t text-book, or one that seems overly complicated and/or requires acrobatic hoop-jumping, I’m naturally inclined to believe that I’m potentially being led into murky waters and there’s a good chance I’d be skirting the lines if I follow through.
There’s that age old proverb whereby a true expert should be able to clearly explain their service to a layman so they understand.
Point being, if someone can’t explain their service to me so it makes sense, I’m out. “Trust me, I’m an expert” won’t cut it.
Where landlords shouldn’t get expert tax advice from (how to identify cowboys)!
In a timely follow-up post, Dan published his tips on how to identify cowboys.
To summarise the highlights and my personal favourite warning signs:
- Any tax advice should come from someone at a respected regulated firm, and/or with a tax qualification. You need to be speaking to the actual tax adviser, and not unqualified people giving tax advice.
- Anyone claiming to be “HMRC approved”. HMRC doesn’t approve any tax planning.
- Anyone shilling acrobatic tax planning solutions, providing reassurances like, “HMRC has never challenged any of our structures”.
- Anyone pitching “our unique systems”, “our proprietary strategy”, etc. When it comes to tax, sensible people do what everyone else is doing.
- “We’ve glowing testimonials from dozens of clients” – this is how a salesman talks.
- No discussion of risks and downsides.
- Pressure to go ahead/sign a contract.
- “Your normal advisers won’t be familiar with these obscure rules”. A common tactic to pull clients away from trusted existing advisers.
- No mention of ATED – a special tax that will apply if a corporate or LLP (with a corporate partner) holds residential property.
Once again, all sounds legit. I dig it.
To conclude (and final disclaimers)…
Before I sign off to start preparing my sparkly new – all bells and whistles – tax planning service (be sure to look out for my sales email – coming to your inbox soon, for only £39,899! That’s what you call undercutting the competition – entrepreneurship 101), I do want to clarify that I have nothing against Property118.com. I know they have an active community, sharing plenty of useful information for landlords and property investors. However, admittedly, I am now suspect of their tax planning services (not that I would have used it anyways, I’d probably need to sell both my kidneys for the entry level package).
Above all, my unwavering allegiance is to our community, so if I feel like any useful and important information has come to light, then I’m obligated to share it, allowing you to decide what you want to do with the information.
Other than a few Tweets post-publication of the investigation, I have no prior or current relationship with Dan Neidle or Tax Policy Associates. I only became aware of him and his company’s work after I saw their investigation on Property118’s tax planning service circulating on Twitter/X.
To reiterate, I’m not sure if Property118’s/Cotswold Barristers tax planning service is as bent as nine bob note or not – I genuinely hope it’s legit for their own sake and for the sake of their clients – but what I do know is that a seemingly very qualified and reputable tax lawyer seems to have grave concerns with it, so we’d be foolish to ignore them.
Be careful out there!
Landlord out xo
Disclaimer: I’m just a landlord blogger; I’m 100% not qualified to give legal or financial advice. I’m a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.
