As of 1st October 2013, HOMEsure (UK) Ltd trading as HOMEsure Lettings will have to be VAT-registered. Please note that our Estate Agency Sales and HOMEbuild Maintenance division will remain VAT-free.
We sent out the following notice to all of our clients:-
With mixed emotions of pride & frustration, we regret to inform you that HOMEsure must now become VAT-registered.
As most of our landlords are unable to claim back VAT on their agency fees, we structured the company in a particular way so we could offer a value-for-money service and save you money where we could.
By doing this, we have managed to save our landlords in the region of £72,000 since our incorporation in 2007, which we are immensely proud of.
Having now exceeded the VAT-threshold on just lettings alone, it is a shame that this honeymoon period must end and we must now charge VAT.
We have only just learnt this news, however, our Accountant has advised us that we dont need to register for VAT until we hit the threshold for this financial year. Therefore, we are in the fortunate position to be able to forecast when we have to start charging VAT on our fees, which will be 1st October 2013, and give you plenty of warning.
We wanted to give you this much notice (2 1/2 months) so that you may review the service you are receiving from us and the amount of money you pay for it. Further, if you wanted to explore the options of self-managing your property or even changing agents, we thought it fair & ethical to give you as much opportunity as possible to do this, as we appreciate 20% is quite a hike in cost.
For transparency, your options are as follows:-
1) Self-manage your tenancy(s) yourself.
Provide us with your 2 months notice to terminate our management agreement with you. Again, in the essence of fairness, any tenancies that are still within the initial fixed term agreement, will NOT be subject to the minimum management term which is equal to the initial fixed term period (as per the Terms of Business).
2) Switch agent.
2 weeks should give you sufficient time to research and speak to other agents who may be interested in taking on your property(s). You would then be able to give us the 2-months notice as per point 1 should you wish to leave us.
3) Stay with us.
Obviously, we sincerely hope you choose to stay with us and are happy with the service you are receiving. We like to think of the situation thus: yes, its a bitter pill to swallow to now have to pay VAT, however, we have managed to save 17.5%/15%/20% on your fees over the last 7 years so, overall, youre in a better position!
Wed be grateful if you could confirm via return email which option you have chosen to go for. If you choose to stay with us, we will provide you with a new Terms of Business document to reflect the change in VAT-registration.
Nick Stott & Mark Loughnane
We have been overwhelmed by the positive response from our Landlords, with over 70% immediately pledging their continued support, and no negative responses thus far.
We’re delighted to have saved so much money for our Landlords & Tenants over the last 7 years, but is still tough to bring in an additional cost even if, overall, you are better off.
It’s a good job letting agents’ fees are tax deductible!