Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "31/07/2015 - 22:35":

These are great - thanks!!!

There are two arguments I keep coming across that support the Chancellor’s proposal. I thought it might be helpful to some to say how I combat them.

1. Homeowners do not get tax relief on their mortgage so why should Landlords?
Well apart from the numerical examples we’ve produced to show why, I’d like to point out that if I take a loan out to buy a car I get no tax relief. However if I’m a business and borrow for a company vehicle then it’s a justifiable expense. Why is it different?

Second is the point is about homeowners not getting mortgage interest relief. They used to, so reinstate it. The Chancellor said he wanted us all to be on a level playing field so if that’s the crucial factor then the answer is easy. I think this is an important point as it’s a good argument against those that have sympathy and empathy (as I’m sure we all do) with those people that want to get on the ladder. It should evoke public support.

2. Property Investment is the same as investing in shares so shouldn’t get the relief.
Do stock market investors have to:
Do annual gas safety checks?
Do they need to provide carbon monoxide detectors?
Are they responsible for immigration?
Are they responsible for legionnaires disease?
Do they have to legally register deposits?
Do they need to issue prescribed information
Do they have to provide smoke or fire alarm systems?
Do they need to do fire alarm system checks and servicing?
Could they get phone calls in the middle of the night about something and have to respond immediately?

The list goes on of course. I’m not saying that any of these things are bad or unnecessary, I just try to draw a list to show that it plainly is NOT the same as taking a punt on the stock market.

Please post this message on property and business related LinkedIn Groups you are members of.

Landlords Fight Back Against Budget Tax Plans - Sign Petition Now

A group of well informed landlords have got together to challenge the Government’s plans to restrict finance cost relief for landlords. All you need to know about the proposal and its likely consequences are contained in the link below:
http://www.property118.com/?p=76936

I phoned the RlA last week which I am a member of to ask what they were doing about the budget announcement on changes to tax relief and the advice I received was that " this is a done deal "
This is astonishing . The RLA had not even organised a petition, and were not aware of the petition being started by Ruhal Uddin. They should be talking to the other landlord associations such as the NLA and others and sending out a link to the petition to all their members .
The leaders of property meets and the property educators should also be doing More to make sure that all landlords are fully aware of the changes and are sent a link to the petition . Berkshire property meet and the pin network and progressive property network - I haven't heard a word form any of them on this .
I honestly believe that most landlords are still unaware of the seriousness of the implications of the budget changes . I have made an appointment to see my MP , Michael Fallon and I urge all landlords to do the same .

Has anyone considered seeking a judicial review of mr Osbourne's plans for us ? As I understand it the basis for a judicial review would have to be that the proposal are irrational . Taxing losses is surely that.

Reply to the comment left by "Dr Monty Drawbridge " at "31/07/2015 - 08:07":

Sorry if this has been said before, as I have missed a large chunk of the conversation due to time constraints and come back in around page 140:

I think that comparing the tax position to company treatment is a red herring and does not reflect well on our cause. Corporation tax is a flat rate 20% [*], so even if they were treated the same, their tax bill would not change.

It is the tiered income tax rates that cause the problem for indivivuals, based on the idea that higher earners shoud pay a higher proportion of their income, and the principle that borrowing for personal investment is not tax deductable.

[*] https://www.gov.uk/government/publications/rates-and-allowances-corporation-tax/rates-and-allowances-corporation-tax

Reply to the comment left by "John McKay" at "01/08/2015 - 09:12":

My response to point 2 would be that landlords are providing a service to people who cannot afford to buy and have no chance of social housing. With strict lending criteria for home ownership and lack of investment in social housing, what state would the country be in if there was no alternative. We provide housing choice and we should be proud of that. It is because of the important role we play, we should be encouraged to continue to invest in our businesses.

Reply to the comment left by "James Tallis" at "31/07/2015 - 08:26":

After 32k….This goes to 32.5 % tax on individual after 18% company tax….A total rate of over 50%

This is wrong.
You do not add percentages, you multiply the residual amounts

I calculate a tax rate of 44.65%:
(1-(1-0.18)*(1-0.325))*100

Of course, profit will be lower because of additional company expenses, but it beats over 100% tax rate.

I've a meeting coming up with my local MP, Andrew Murrison, and having these counter-arguments will be really useful.

Keep them coming!

Interesting facts about E-Petitions...please see link below:

http://www.theguardian.com/commentisfree/2014/feb/24/e-petitions-often-worse-than-useless

This is a message I am sending to friends to invite them to show their support:

Hey Guys,

Please sign this petition.

https://petition.parliament.uk/petitions/104880

George Osborne announced plans in his Summer Budget to change the way that landlords are taxed. As a result of these plans:

Some landlords will pay more in tax than they make in profit;
Some landlords will face huge tax bills even if they make a loss;
Thousands of landlords will be forced to sell up;
House prices could crash if landlords flood the market with houses for sale;
Some landlords will be declared bankrupt as they won’t be able to pay their tax bills;
There will be a major reduction in the supply of privately rented accommodation;
Reduced supply will result in higher rents;
Tenants will be made homeless if their homes are repossessed by lenders;
There will be fewer homes available for people on benefits once landlords start to sell their properties.

I am helping a small group of fellow landlords to get the issue debated in the UK Parliament.

Your support would be greatly appreciated.

Please help us spread the word about this petition. We need 10,000 signatures to get a response from the Government and 100,000 signatures to get a debate in Parliament. The petition was only launched a few days ago and so far over 5,000 people have signed the petition. We are well on the way to meet our target but we need your support.

This is not just about landlords trying to protect their businesses. The campaign is much more than that. We believe that there will be serious social and economic consequences for the country if this ill thought out tax plan goes ahead.

If you want to know more about this proposal, please look here:

http://www.property118.com/?p=76936

Please sign now.

https://petition.parliament.uk/petitions/104880