Leaseholders hit again by cost increases
Going up... the increase in the National Living Wage will hit leaseholders in 2020
Many services such as cleaning and gardening contracts provided to blocks of flats rely on minimum wage labour. With the National Living Wage rising in April this year from £8.21 to £8.72 for workers over the age of 25 - an increase of some 6.2% - once again leaseholders are going to feel the pain.
Leaseholders who are unable to recover VAT on the service charges they pay, continue to suffer from VAT increasing from the previous long term norm of 17.5% to 20% in 2011. Flat owners, via their service charge, have also suffered continual rises in insurance premiums due to both five years of IPT (insurance premium tax) increases from 6% to 12% since 2015; the abolition of the 3.4% national insurance rebate on porters wages; and a rise from 2% - 3% in employers auto-enrolment pension contributions.
Added to this, the rise in the minimum wage may be small but it is yet another expense to hit leaseholders, already living with the spectre of big bills for safety improvements on their blocks (see our 9 January blog for more on this).
At Ringley all our Relationship Managers are now letting clients know in advance of their March/April budgets that, to be prudent, provisions must be made for these cost increases.
Author : Mary-Anne Bowring
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