Despite reports of a crackdown on buy-to-let, with lurid headlines about tax inspectors trawling the small ads in local papers for undeclared lettings, very few landlords are evading tax, according to tax accountants in the sector. The more usual problem is that they miss out on many allowances that could slash their tax bills.

Amateur landlords overpay the most because they will not take the time to do the job properly, according to accountant Arthur Weller of www.property-tax-portal.co.uk.

“Lots of buy-to-let landlords have other main income and the property is just a sideline, so they don’t apply themselves to running it in the same way that they would if it was their main business,” he says. “In addition a lot of people slide into property investment more or less accidentally, when they let out their home instead of selling it when they move.”

The pitfall that most amateur landlords fall into is failure to keep proper records. “There are complicated rules about a main residence that has been let out and then sold, and you can save an enormous amount of tax by getting it right,” Weller says.

Many allowances are available that non-specialists rarely appreciate, mainly in areas where the Chancellor has decided to promote social aims, such as bringing empty flats above shops back into use.

“There are allowances for converting business premises into flats and you can save VAT when converting non-residential premises into homes,” Weller says. “Many people do not realise you can claim 10 per cent for wear and tear.”

Another common failing is to assume that verbal agreements are binding when it comes to the Inland Revenue.

“It is essential to make agreements on who owns what in writing,” Weller says. “Families often make verbal arrangements around the kitchen table, but these days many families break up and cannot agree on what was said.”

Leonie Kerswell, private client tax partner with PricewaterhouseCoopers, sees many investors who have failed to keep notes of maintenance work and other costs such as insurance on their properties. Many items may seem trivial at the time – who, for instance, keeps the receipt for a packet of screws from B&Q costing 1.30?

“Keep very good records – it can all mount up to several thousand pounds by the time you calculate the tax bill,” Kerswell advises.

A considerable amount of tax can be saved by setting up the operation correctly in the first place. Borrow as much money as you can, Kerswell says, because interest is tax-deductible but capital repayments are not. Make absolutely sure you are only claiming the interest, however. Wrongly claiming tax relief on capital repayments is the main focus of tax investigations into buy-to-let.

“If you are married, try to take advantage of the large allowances of the lower tax paying spouse,” Kerswell says. “Remember that losses on one property can be offset against profits on another.”

But the best advice is to get professional advice. After all, the accountant’s fee is itself tax-deductible.

Unfortunately, good professional advice is oftdifficult to find, says Chris Town of the Residential Landlords Association.

“Getting good advice is not always as easy as it sounds, because there’s a shortage of accountants who are up to speed on our sector,” he says. “Once you have someone who understands that it needs to be approached as an investment business not a trading business, you are on the way to achieving a realistic tax liability.”

Do the maths

Arthur Weller’s top five rules for landlords to swot up on:

* Principal permanent residence relief

* Furnished holiday lettings

* Capital allowances

* Allowable interest

* VAT

The couple moved on to their wide-beam canal boat in Bristol Marina when they got together four years ago. “I’d been sharing in houses of eight, and I felt like I was getting too old to live with loads of people. A canal boat seemed like the only way to get a place of your own with the money we had to spend,” says Sally, 35. “Sam was living on a boat already, in London, and I fell for him - and for his boat, really.”

For many, it’s hard to imagine that inhabiting a canal boat could score for you in the eligible-bachelor stakes, but living afloat has never been more attractive. As house prices continue to rise, many Britons are choosing a life on the water.

British Waterways, the agency that operates most of the country’s canals and navigable rivers, has announced that it needs to create 11,000 new berths for canal boats in the next decade to keep pace with demand, which has doubled over the past six years.

Despite this investment, finding a mooring can be extremely difficult, particularly in the South-east of England.

“The number of people buying boats has been increasing steadily for many years,” says Jonathan Ludford of British Waterways. “Unless new boaters plan to cruise continually around the waterways network, they will need to secure an appropriate mooring. Available residential berths are few and far between and often have long waiting lists.”

There is, he says, no fast track to securing a mooring: it’s a case of getting on the waiting list for as many private marinas and waterways as possible in your chosen area. The more popular the location, the further in advance you need to plan, and in London it could take three years or more. But it is essential to secure a mooring before buying a boat – doing it the other way round is one of the most common mistakes boat-buyers make.

Around 15,000 people live on boats in Britain. It has long been regarded as a hippie lifestyle, a back-to-nature type of existence for people who are prepared to dispense with most of their creature comforts. There are certainly disadvantages to living on a narrowboat, the classic canal-boat design. These boats can change hands for as little as 20,000, but they usually bring with them chores such as pumping out the chemical toilet, refilling the onboard water tanks and charging the batteries. But the biggest snag of all is, as the name suggests, that they are extremely narrow.

But with the average house price based on the latest Land Registry figures now more than 200,000, more affluent buyers than ever are choosing a life on the water. Among the wealthiest is Simon Woodroffe, the owner of the Yo! Sushi chain, who bought a houseboat and mooring in Kensington and Chelsea last year for a reported 500,000, certainly less than his not-too- distant neighbours over on Cheyne Walk. With three double bedrooms, two bathrooms and an open-plan living area spread over two decks, it’s a far cry from the boats that line towpaths in the rest of the UK.

Even for the less well-financed, moving on to a boat need not be a claustrophobic experience, or lead to a crisis a few months down the line. Wide-beam boats such as Sally and Sam’s span a more generous 9ft, allowing for more comfortable cohabitation (and fewer relationship tensions). Also, many moorings now allow boaters to “plug in” their craft, supplying the boat with mains water and electricity, and in many instances, broadband internet, cable TV and a telephone line. More established marinas such as Bristol’s feature a laundry and common room, too.

But if the facilities and quality of life is increasing, so is the cost of mooring a boat. The most basic mooring in an isolated spot in the countryside can set you back as little as 500 a year, but city moorings are usually several thousand.

And in a category of their own are London and the South-east, where BW says it has a waiting list of 300. Some people have been waiting for years. BW is currently marketing 12 new moorings in Northolt, west London, on the Paddington arm of the Grand Union Canal. Per year, they cost 5,250 – still, that’s not even half- way to the annual cost of a mortgage on a small one-bedroom flat in most parts of London, though of course that’s before you buy the boat.

Many canal boats on the market do come complete with residential moorings. The mooring can sometimes be transferred to the new owner, for a price: some marinas charge 2 per cent of the boat’s value, while others reportedly extract up to 10 per cent.

A residential mooring, once obtained, comes with a postal address and a council tax bill from the local authority. The good news is that all canal boats are band A.

There are alternatives to a residential mooring. Boat owners can opt for a life of perpetual motion. There are thousands of visitor moorings around the country where anyone is free to moor up for the night. Technically, boaters are supposed to move on within two weeks, sometimes less.

Once you’ve found the mooring, bought the boat (see sidebar) and got insurance, all that’s needed is a licence, usually from British Waterways or the Environmental Agency, which will allow you to cruise Britain’s canals at leisure. And taking your new home for a spin for the first time is one of the pleasures of a life afloat – or is it?

“We’ve been a bit sluggardly,” admits Sally Arthur, who, along with her partner, works in animation. “I think we’ve just made one journey – from the boat yard to here. A lot of people get away for the day but we treat it as a floating home. I think it’s beautiful, here in the marina: incredible sunsets and ducks outside your window in the mornings. It makes you happy a lot of the time.”

How to get afloat

* Some sell for under 20,000, but a medium-sized vessel in good condition with plumbing and electricity will cost from 30,000-50,000. Boats that come with desirable moorings will cost significantly more. Always sort out a mooring before buying a boat.

* When first viewing a boat, inspect the welds on the exterior of the cabin. Cheaply built boats will have wavy cabin sides; top-class hulls will have no visible welds and the cabin sides should be flat. Look out for signs of rust.

* Inside, the smell of rot, streaks in the wood or water marks indicate leaks that need investigating.

* Buying a boat is as fraught with hidden dangers as buying a used car, so it’s essential to have a survey done. They start at a few hundred pounds, but for older boats the hull must be inspected, so the boat has to be craned out of the water, costing up to 1,000.

* Run the engine, and if you don’t know your stuff get a mechanic to come with you.

* Make sure it has a current Boat Safety Certificate – required to get it insured. They run for four years and can cost a lot of money to obtain for an older boat.

* Insurance is usually less than 200 a year. Brokers include Craft Insure (www.craftinsure.com).

* High-street banks won’t lend money to buy a boat as a home. There are a number of specialists, however, who will lend up to 80 per cent of the boat’s value. Lenders include Collidge and Partners (www.collidgeandpartners.co.uk)

* Other useful websites include: The Residential Boat Owners Association (www.rboa.org.uk); The National Association of Boat Owners (www.nabo.org.uk); British Waterways (www.britishwaterways.co.uk); and boat broker Virginia Currer Marine (www.vcmarine.co.uk)

The reason is straightforward: Low expense ratios are one of the better predictors of long-term success for funds, and high expense ratios are ongoing and tough burdens for funds to bear. However, we also recognize that a limited number of funds have been able to achieve real success despite being somewhat pricey, and we’re mindful of the fact that expense ratios aren’t set in stone. In fact, several factors including asset growth and changes in fee structures can lead to lower costs. That’s why we don’t totally dismiss or ignore funds whose high cost are their only meaningful shortcomings.

With that in mind, we’re keeping a close eye on four domestic-equity funds that have notable strengths as is but that would become quite compelling if their expense ratios declined significantly. Please note that this is not an exhaustive list of such funds and that we’ll cover international-stock and fixed-income funds with these traits in future columns.

http://quicktake.morningstar.com/FundNet/MorningstarAnalysis.aspx?Country=USA&Symbol=CHCGX http://quote.morningstar.com/Switch.html?ticker=CHCGX
This fund has several positive attributes. Whit Gardner and John Lewis have run this large-growth fund since it opened in 1997 and had more than 10 years of investment experience prior to that, including a few years as analysts at the well-respected growth boutique Friess Associates. Gardner and Lewis follow a distinctive growth discipline and never waver from it. And while their dedication to their strategy has hurt at times, they’ve delivered excellent long-term returns with it here. All that’s encouraging–and there are certainly grounds for long-term optimism–but the fund’s expense ratio is nearly 40 basis points higher than the median for no-load large-cap offerings, and that’s a significant blemish.

http://quicktake.morningstar.com/FundNet/MorningstarAnalysis.aspx?Country=USA&Symbol=TGFFX http://quote.morningstar.com/Switch.html?ticker=TGFFX
It’s too bad that this fund has an expense ratio of 1.38%, whereas the median no-load large-cap offering has an expense ratio of 0.98%. The fund stands out from the rest of the large-blend category because Tim McKissick and John Snyder focus on 25-35 names and readily build big sector weights as they pursue companies trading below their estimates of their intrinsic values. This concentration naturally leads to some rough spells, but the managers have produced strong returns since this share class opened in late 2004 and since an older share class opened in 2001. The fact that the managers have also earned good longer-term results at a less-focused large-blend fund is another plus.

http://quicktake.morningstar.com/FundNet/MorningstarAnalysis.aspx?Country=USA&Symbol=BARAX http://quote.morningstar.com/Switch.html?ticker=BARAX
This fund boasts several strengths. Lead manager Ron Baron has been at the helm since this mid-growth fund opened in 1987–and he has 15 years of experience running another mid-growth offering and 12 years of experience running a small-growth fund–so he’s one of the most-seasoned smaller-cap-growth managers around. The patient and price-conscious strategy he follows here has a lot of appeal. And he has executed his measured approach well in a variety of conditions, so the fund has earned good risk-adjusted returns over the shorter and longer terms. In fact, all that keeps the fund from being a truly topnotch mid-growth offering is its expense ratio, which is almost 20 basis point higher than the median of 1.15% for no-load mid-cap offerings.

http://quicktake.morningstar.com/FundNet/MorningstarAnalysis.aspx?Country=USA&Symbol=FFSCX http://quote.morningstar.com/Switch.html?ticker=FFSCX
There’s no denying that this fund has a number of attractive features. Irene Hoover has been in charge since the fund opened 1998, and she ran another small-growth offering for a few years prior to that, so she has ample experience. Her price-conscious growth strategy, which favors financially healthy companies that dominate their industries and have strong cash flows, is sound. She has produced good risk-adjusted returns with that strategy here and did the same at her former charge. However, the fund’s expense ratio is more than 40 basis points higher than the median for no-load small-cap offerings, and that’s a substantial flaw.

It might seem as if your existing property is inadequate in all sorts of ways, but the stress and expense of moving are such that it is worth exploring all possibilities for improvement before looking elsewhere.

Any fat-cat corporation boss will tell you that the key to success is as much about efficiency as growth. Our homes are no different – we should try to make best use of what we already have. Extending the kitchen or converting the loft will add space effectively, but many people ignore what can be achieved by rearranging their existing rooms. This can cost-effectively create a better usable space, and genuinely and positively change a family dynamic within the home.

Clearly, this is not the answer to fundamental problems of location, nor that of a tiny garden. However, the way we live is changing and the way we use our homes is changing with it. Many homes that seem incompatible with the occupant’s lifestyle can be changed to fit. I have seen scores of Victorian houses – designed for Victorian living – that have been adapted to a less formal arrangement, which reflects our 21st-century lifestyle.

The most common example of this is the simple “knock-through”. It might seem like a straightforward choice between two rooms or one, but the effect can be significant. Firstly there is the sense of space. Cue Hugo’s law of overlapping spaces, which states: Two separate rooms combined seem bigger than the sum of their parts because the functions previously served by each half of the space (for example: dining and living rooms) now can overlap so there is more space for each. Then there is the penetration of daylight: seeing daylight pouring from one end of the house to overlap with light from the other end gives an uplifting effect previously broken by the spine wall.

Possibly most important of all is the connectivity of what we do in our homes. The house that my children spent their first six years growing up in is a very typical Victorian two-bed terrace which originally was all cut up into a series of small, gloomy rooms. By clearing out the separating walls and putting in a visually lightweight staircase, the space flowed, the light poured from front to back and the kids had space to play within touch of Mum at her computer or Dad at the kitchen sink. The point of this picture of domesticity is that their growing-up experience was significantly enhanced due to the changes we made within the house.

The “open-plan” concept may seem scary, but the way I see it, even separate rooms are connected (with doorways). The first level of open-plan is wedging the doors open, and there are many shades of grey between this and a completely open Manhattan loft.

The most effective solution in an existing house is to combine the benefits of opening up with devices to zone the functions of dining, living, cooking etc. Changes in floor level or finish, double or sliding doors or screens, and even the positioning of furniture can fine-tune this effect.

Architects are often accused of not thinking about their client’s expenditure – sometimes rightly. So, for a cost-effective tip, before you go and spend the earth on agents’ fees and stamp duty, or alternatively fork out for an extension up, down or sideways, invest a little in exploring the possibilities within. You may be surprised.

Hugo Tugman runs the design service architectyourhome.com

h.tugman@independent.co.uk

But finding a reliable, trustworthy reclamation yard is not always easy. Are you being ripped off for that fireplace? Does that chair have woodworm? It’s not always easy to know, but the companies listed below come highly recommended, and between them they should be able to source whatever you’ve set your heart on.

In two weeks, more than 50 companies will gather at Knebworth in Hertfordshire for the world’s largest salvage fair. If you want to find truly original items for your home, head along. And if you can’t make it, keep this guide to 10 of the best reclamation yards around.

1. LASSCO

This is where the architects and designers go, so you’ll have to be quick off the mark to find the hidden gems. Prices are on the high side, but staff know their stuff. Occasionally they won’t sell you an item if they don’t approve of what you plan to do with it.

Best for: old school desks that make great worktops. Usually has a large stock of cast iron radiators and Victorian pine floorboards.

Current offers: late-Victorian earthenware bath from Mile End Hospital, 4,750, Edwardian enamel sign, 165, Art Deco radiator, 1,325.

Brunswick House, 30 Wandsworth Road, London SW8; www.lassco.co.uk; 020 7394 2100

2. RETROUVIUS RECLAMATION AND DESIGN

Retrouvius’ owners studied architecture at university. It’s a small set-up, but their stock’s good.

Best for: wacky items from the 1960s and 1970s. If this is your vibe, or you just want to find something a bit different, this is the place to come.

Current offers: pair of Eames high-back lounge chairs with dark brown upholstery for 395 each (plus VAT); warehouse lamps from the Rover factory at Longbridge, rewired and fitted with hooks and chains, 195, 1970s steel table with mirror top, 750.

2A Ravensworth Road, Kensal Green, London, NW10; www.retrouvius.com; 020-8960 6060

3. COX’S ARCHITECTURAL SALVAGE YARD

One of the largest salvage yards in the country. It also has a good website which is updated every two weeks and flags up new arrivals.

Best for: doors and handles, fire surrounds, beams, flooring, brassware.

Current offers: church pew, 245, cast iron fanlight, 800, French granite horse trough, 675.

10 Fosseway Business Park, Moreton in Marsh, Gloucestershire; www.coxs architectural.co.uk; 01608 652 505

4. INSITU

Insitu is currently only open by appointment as its owner Laurence Green is always out on the hunt for new treasures.

Best for: unusual water features made from old ceramic insulators. Green also buys cast iron baths from the manufacturers that are seconds, restoresthem and sells for half price.

Current offers: small Belfast sink, 50, reclaimed maple floor, 15 sq m, york stone flags, 45 sq m.

252 Chester Road, Hulme, Manchester; www.insitumanchester.com; 0161 839 5525

5. WALCOT RECLAMATION

Two yards, one for building materials and one for the interiors, doors, furniture and fireplaces. There is also a repro shop which produces replicas of popular items.

Best for: Walcot has an enormous selection of doors, so it’s easy to find the right one.

Current offers: Oak stairs with mahogany hand rail, 2,250 (plus VAT), Victorian stained glass gas light, 660, Victorian fireplace, 275.

108 Walcot St, Bath; www.walcot.com; 01225 444 404

6. ARC RECLAMATION

Arc Reclamation’s owners used to restore houses but started hunting for architectural antiques seven years ago. Now, they offer lots of advice on restoration.

Best for: known in the region for their large selection of doors, Arc also has a few fireplaces and a collection of church furniture.

Current offers: Edwardian stained glass door, 480, Victorian pine stained glass door 499.

Unit 1, Upper Downgate Farm, Sandy Lane, Steep Marsh, Petersfield, Hants; www.arcrec.com; 01730 231 995

7. MONGERS

Established in 1997, Mongers uses local craftspeople to restore and repair many of its items. Owner Sam Coster is passionate about salvage and most of his own 15th century cottage is furnished with stuff he has found over the years.

Best for: fixtures and fittings from the 1890s to the 1950s including Georgian fireplaces, Victorian doors and Norfolk quarry tiles.

Current offers: a full-size wooden-framed church spire that could make a stunning dovecote for 5,000 incl delivery, complete Victorian lavatory with high level cistern, 150.

15 Market Place, Hingham, Norfolk, NR9 4AF; www.mongersofhingham.co.uk; 01953 851 868

8. WRS RECLAMATION

WRS offers everything from furniture and fireplaces to garden ornaments and windows. The site now includes an in-house potter, antique furniture restorers, a restaurant and a gallery.

Best for: ironmongery and garden statuary. Also has a garden and kitchen design service.

Current offers: Regency two-seater strap bench, 2,500; 19th century stone fireplace, 3,500.

Yew Tree Barn, High Newton, Grange-over-Sands, Cumbria; 01395 31498; www.yewtreebarn.co.uk

9. EASY

The Edinburgh Architectural Salvage Yard has an eclectic range of items and is run by a charming family who really know their stuff.

Best for: doors, fireplaces and cast-iron radiators as well as sinks, shutters and stained glass.

Current offers: Victorian pine fire surround 380, cast iron radiator 120.

31 West Bowling Green Street, Leith, Edinburgh; www.easy-arch-salv.co.uk; 0131-554 7077

10. ARCHITECTURAL TREASURES

Prides itself on not selling reproductions, the owner Andy Triplow also runs the Old Radiator Company, which has 3,000 to choose from.

Best for: fireplaces, radiators and doors, which can be restored with the glass of your choice.

Current offers: polished Victorian fire surround, 7,500, ornate seven-section radiator 576

The Old Garage, Smarden Road, Pluckley, Kent; www.architecturaltreasures.co.uk; 01233 840 004

SALVOFAIR 2007 is at Knebworth on 30 June and 1 July from 11am to 5.30pm. Ring 08700 115 007 for tickets or buy online at www.salvo-fair.com

Tips for buying salvage

Thornton Kay is the senior partner of www.salvo.co.uk, the online directory of reclamation yards. More than 150 dealers have signed up to the Salvo Code, a voluntary code of conduct designed to give greater confidence to people that they are not about to buy anything stolen, wrongly removed from a listed site or toxic. In addition he suggests the following:

* Ask where it came from and if it can be used for what you want.

* Ask your builders if they have used salvage before.

* If you buy at auction you may not be able to get your money back if an item is not what it seems. Similar at trade fairs.

* If you are buying a lot, ask for a discount.

* Do wear gloves and stout boots so that you can rummage about.

* If you buy at a yard, the usual consumer protection laws should apply to private purchases.

* For a list of dealers in your area, visit www.salvoweb.com