Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "28/07/2015 - 23:44":

Sorry, Ros, I wasn't sure how to send something to Mark privately. It was not an email as such. We just chatted on Facebook, so it wouldn't have made much sense in fragments. The important thing is that Ruhal was keen to help, and he now knows about this site so he can join and will be able to see how concerned we are about this issue, and also where we are with this cause. I hope I haven't offended anyone by asking him to join; he really was very friendly. I think I may have woken him up!

Connie. You are a star!
And talking about waking up, I'm off to bed!
The battle re-commences tomorrow! I keep thinking about Churchill and never giving up and getting on with it and never saying die.

Hello all

I understand you’ve been trying to contact me. With regard to the petition, apologies, I probably should’ve liaised with other landlords before posting it.

Having reviewed your comments, I have noted that many are concerned with the wording of the petition and feel that it will gain little sympathy from those who aren’t landlords.

However, the petition did have a 300-character limit. Therefore, although my original draft contained arguments to demonstrate that the planned restriction is likely to affect those other than landlords, such as private and social sector tenants due to evictions, increased rent and limited stock – I wasn’t able to fit it all in.

The petition is now up and I don’t think it can be withdrawn. However, if you can find a way to withdraw it, please let me know and I shall be obliged.

In the event that the petition cannot be withdrawn, we have one of two choices, either support the petition or argue about wording. The latter doesn’t do anything to support our objective, whereas the former provides the best possible chance.

Kind regards

Ruhal Uddin

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "29/07/2015 - 00:12":

You, too, BTL! About to read your update on Q&A. I wish I had your brains! You, Ros and Mark are officially my idols!

Reply to the comment left by "Connie Cheuk" at "29/07/2015 - 00:06":

Hi Connie

It was actually limited to 300 characters 🙁

300 words would have been amazing

Reply to the comment left by "Ros ." at "28/07/2015 - 22:14":

Hello Ros

I understand you’ve been trying to contact me. With regard to the petition, apologies, I probably should’ve liaised with other landlords before posting it.

Having reviewed your comments, I have noted that many are concerned with the wording of the petition and feel that it will gain little sympathy from those who aren’t landlords.

However, the petition did have a 300-character limit. Therefore, although my original draft contained arguments to demonstrate that the planned restriction is likely to affect those other than landlords, such as private and social sector tenants due to evictions, increased rent and limited stock – I wasn’t able to fit it all in.

The petition is now up and I don’t think it can be withdrawn. However, if you can find a way to withdraw it, please let me know and I shall be obliged.

In the event that the petition cannot be withdrawn, we have one of two choices, either support the petition or argue about wording. The latter doesn’t do anything to support our objective, whereas the former provides the best possible chance.

Kind regards

Ruhal Uddin

Reply to the comment left by "Mark Alexander" at "29/07/2015 - 00:33":

Hi Mark

I've emailed you.

Thanks

Reply to the comment left by "Connie Cheuk" at "29/07/2015 - 00:04":

Brilliant! Well done Connie!

Reply to the comment left by "Ruhal Uddin" at "29/07/2015 - 00:36":

Hi Ruhal

email received and I look forward to chatting in the morning.

All the best and goodnight

Mark
.

I have made some further changes to the Q&As having now read Stephen Faye's article in YPN. The changed sections are:

In plain English, what does this mean?

Landlords are currently able to offset all their finance interest against their rental income, before calculating their rent profits and therefore their tax bill. This is quite normal in business as the general taxation principle is that tax is applied on profit.
The Government proposes to break this normal taxation practice and require landlords to pay tax on part of their costs. By the year 2021, it will still be possible to get a deduction for finance interest, but the amount will be capped at 20%, rather than the 100% currently available. This is a big change because in most cases, finance costs will be the landlord’s largest cost. No other business is taxed in this way. No the business is taxed on borrowing to invest. We believe that individual landlords who provide valuable housing across the UK are being unfairly discriminated against by the Government.

How might landlords be affected?

Landlords will fall into 1 of 3 categories, in terms of how the tax change affects them:

1) Landlords remains basic tax payer = no change
2) Change pushes basic rate tax payer into Higher Rate Band = more tax paid
3) Existing Higher Rate Tax payer = more tax paid

Thousands of landlords will pay more tax as a result of the proposal. For some, the additional tax will not impact on the viability of their businesses. However, for many landlords who have borrowed substantially to invest in their property business, the consequences will be serious. Some landlords will even lose their personal tax allowance because of the unfair way that the Government will calculate taxable income; in many cases, landlords will pay more in tax in connection with their property business than they make in net profit; in many cases, landlords who make a loss from their property business will still be faced with huge tax bills. We cannot understand how the Chancellor considers his changes will result in a fairer tax system.

The implications for some landlords are such that they will need to sell properties to reduce the tax they pay on their finance costs. There is concern that many landlords will be declared bankrupt as their tax bills will exceed their taxable income. The situation will get worse when interest rates increase.