Summer Budget 2015 – Landlords Reactions

I totally agree that RLA are talking absolute nonsense, when they suggested ”Energy Efficiency measures to be tax deductible as an alternative to Chancellors forthcoming plans. This would equate to a drop of water from Ocean".

Although, I always held RLA in high regard.

I am thinking of sacking my accountant as he is not very creative. As such I have shopped around and have spoken to couple of very good accountants.

One of them suggested that, although he might be playing devil's advocates, but he seems to think, chancellors forthcoming plans may not be retrospectiive..which means they may only apply to new loans from 2017 onwards and may be...may be existing loans will be exempt from new measures!!

I know, this is wishful thinking, but there might be light at the end of tunnel with glimmer of hope.

Fingers crossed!

I asked that accountant, what is Chancellors motive behind this move, if they won't apply to existing loans...Why does not he come clean at this stage?

He responded...may be he is trying to slow down housing market by spreading scaremongering stories...similar to Mr Carney, as after every 3 to 4 months Mr Carney suggests interest rate rise is imminent, once people start panicking, and it comes to crunching point...Mr Carney backtracks by stating, inflation is lower than expected etc etc...and goes back to square one!

Reply to the comment left by "Saeef Khan" at "17/08/2015 - 21:31":

Hi Saeef

That is what we need to fight for. If the Chancellor intended it only to apply to new loans there would be no need to phase it in over 4 years.

I wrote to my accountant some 2 weeks ago and have yet to receive a reply. They provide a tax return service and at times have to be corrected. There is a dirth of information here about any pro-active accountants comments that others may have fortunately experienced. Yes I sent details to sign petition etc.
I subscribe to LPTM software from Amer Siddiq,who promotesTaxInsider.co.uk He is advertising an article written by James Bailey that professes to cover this area. I have seen earlier references to it on this site which disappointed. I could subscribe but prefer not to. (I was last hooked in on automatic payments for 18 months before cancelling because there was nothing really I could not read elsewhere. My e-mail requests to this commercial organisation suggesting it should be released for the common good have fallen on deaf ears. (at least I tried).
Has anyone received any good accountancy advice they may be willing to share? Or can they recommend a decent accountant who understands the PRS? I guess we are all going to need this. Mine are dormant at present. Keep up the good work. Chris.

Reply to the comment left by "Chris Novice Shark Bait" at "17/08/2015 - 23:13":

Hi Chris

See the Tax section of this website >>> http://www.property118.com/tax/
.

George Osborne could not provide a credible justification for this stupid idea on 7 July, and the one provided by the Treasury since then is misleading nonsense.

Since the idea came from the Green Party I decided to look for its justification. I couldn’t find anything about it in their manifesto. All I found was this from Accountancy Age: http://www.accountancyage.com/aa/feature/2405508/election-2015-the-parties-tax-and-spend-cases

“In terms of feasibility, the Greens have a lot of convincing to do. Huge spending is planned should the party achieve the astonishing and make it into government. One commentator described the party's case as of "fantasy economics", with the taxation proposals unlikely to get close to covering the costs of its many substantial projects.

By way of example, the party is proposing over the course of the coming parliament to build 500,000 homes for ‘social rent', at the cost of £27bn. Most of that sum would be derived from the removal of the mortgage rate tax relief from private landlords, according to Green leader Natalie Bennett.

"Tax relief is often offered because you're doing a public good, but at the moment landlords are collecting large amounts of funds from the public purse from housing benefit and we're not seeing the benefit of that," she told the Independent.”

This is incredibly stupid. Firstly, we are not getting a “tax relief”, we are deducting finance costs, like every other business in the country.

Secondly, people on housing benefit are only one part of the PRS. And as regards that part, the benefit that society gets is enormous – we house some of its most vulnerable members.

And thirdly, their landlords pay tax on the rental profits, as do all landlords in the PRS.

So there it is. An idea without any justification, springing from the ignorance of the leader of the irrelevant Green Party, has been adopted by the Chancellor. We now know that any attempt at justification will be nonsense. We just have to keep pointing it out. As someone posted earlier, it’s like the Emperor’s New Clothes.

Reply to the comment left by "Appalled Landlord" at "18/08/2015 - 00:02":

Hi Appalled.
This blog by Professor Philip Booth (my pal now, actually, as we occasionally email each other!), showed a spooky amount of foresight:

http://www.iea.org.uk/blog/the-green-interview-%E2%80%93-failed-on-style-what-about-the-substance

Mmmm. Have been playing with a spreadsheet and this may not be as bad as thought.... If we can carry forward the non relief portion, I.e. 80% of each year, then using an example of £100K annual interest, by the third year, we are actually able to claim more relief than now... In Year 1 £20K , year 2 £36K, year 3 £48.8K year 4 £59.04K year 5 £67.23K and so on.... The un-used portion keeps getting bigger and the accumulated amount of relief "breaks even" in year 4.... See https://www.dropbox.com/s/ryfozqiy55a4d3x/tax%20calcs%20on%20interest.xlsx?dl=0

Reply to the comment left by "Ian Simpson" at "18/08/2015 - 07:48":

Hi Ian.
Can you do a more detailed example of this - for us mathematically-challenged people? I'm not going to get excited until I understand it. Maybe that little sentence in the HMRC document will turn out to be our saviour....