Summer Budget 2015 – Landlords Reactions

Thanks , this is what I have sent to Mr Fallon MP

Mr Fallon,

Thank you for your time today.

I would like to follow up on one point you made which is “why is it unfair to treat all Landlords the same and reduce relief for all to 20%. "

The only reason mortgage tax relief is at 40/45% currently is because the rental profits are also being taxed at this level. So £1 extra of ANY expense means £1 less profit and therefore 40/45p less tax to pay i.e. tax relief of 40/45. If the rental profits were taxed separately from a persons' other income at a rate of 20% (as incorporated Landlords do), then there would only “tax relief” of 20p for each £1, as is the case for basic rate taxpayers.If we are to pay tax on our deemed profits , (which includes the adding back in of mortgage finance costs thereby artificially inflating profits ) upon which we are then taxed at 40 % or 45%, to then only allow 20% of tax relief on those costs is clear unfair and does not treat all landlords equally. I invited you to read some of the worked examples I provided you with which illustrate the point and I hope these help to demonstrate why to reduce the the tax relief to 20% for all is grossly inequitable and penalises higher rate taxpayer disproportionately. .

I do believe that the terminology being used is causing the confusion. Landlords are not getting “relief”. It is not like MIRAS was, where we deducted mortgage interest from our salaries before the tax was calculated.We deduct interest from our receipts, like landlords in every other country in the EU, and like every other enterprise in the UK. The use of the word ”relief” is designed to confuse people.TheTreasury’s claim that: “By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system.” is the OPPOSITE of the truth. Finance costs incurred by individual landlords will be treated DIFFERENTLY by the tax system. Some landlords will be unaffected, some will pay a levy on their finance costs of up to 20% and possibly lose the personal allowance, and others will pay a levy of up to 25%.This lie brings shame on the Treasury, as its Civil Servants know the truth and is probably the reason why you have been contacted by only three landlords in your constituency , when there are probably hundreds of landlords in your constituency and many thousands across the country who simply do not yet realise how they will be affected by this.

Can you please put this point to the Treasury again .

With thanks

Reply to the comment left by "Darlington Landlord" at "05/09/2015 - 14:59":

Sorry for the duplicate posts!

I kept getting a gateway timeout message when trying to post and thought it hadn't worked

Just sent an email to Ben Howlett, MP (Conservative) for Bath, Somerset

Reply to the comment left by "Charmaine ******" at "05/09/2015 - 15:19":

I would suggest:
a) swap the order of the paragraphs, so that "'relief' is not the correct term" comes first.
b) put 'relief' in quotes throughout the (now) second paragraph, to emphasise the point in paragraph 1.

More than £100k refugees are likely to emerge due to recent crisis which will force councils to be at mercy of landlords.

Council in return can be held ransom by landlords as a result....consequently chancellor may have to rethink his proposals!

Landlords mega important as a result.

Reply to the comment left by "Michael Barnes" at "05/09/2015 - 18:56":

I agree, Michael. I always try to remember to put 'relief' in inverted commas, as it's the term they have deliberately used to build this whole shananigan on. For anyone who says it's always been called that, I'd say 'then it's always been called by the wrong word.' Sometimes people assume or imply that these words are God-given (I'm especially thinking of the agents provocateurs/those whose aim is to spread despondency, that we get on this site), but these words have been invented and adopted by fallible people and sometimes with a sinister ulterior motive - so that they can suddenly spring this crap on us, for instance. The Chancellor knew exactly what he was doing. If he had called a spade a spade, and that he was now not allowing us to offset the costs of making a taxable profit, the furore would have been instant, rather than us having to battle to get people to understand. Although of course many MPs will now understand but are being deliberately obtuse out of their cowardly fear of their 'superiors,' and/or their ambition to climb the party ranks. Pretty pathetic.

Hi Mark,

My other half is a tree surgeon who does work at some Belvoir properties around us. All of them have been owned by a landlord with only one or two properties. Wouldn't know if they were incorporate or not, but judging by the way they work I'd doubt it.

Reply to the comment left by "Moffard John" at "05/09/2015 - 19:22":

This had crossed my mind, particularly as most of my property is near to Dover and the channel tunnel!

Perhaps they need us mote than we need them?

Mmm. Firstly, I wonder how many migrants will be allowed into the UK. Then, how will they be housed initially and in the longer-term? Many of us landlords don't actually have many vacancies at any given time as the demand for rental accommodation is high anyway. Then, some of our mortgage companies don't allow us to house the unemployed. Also, our insurance companies may not pay out if there was damage or a fire etc., if we had housed people not in work who don't have guarantors. Also, I'm wondering about all the legislation about space needed for each individual, the size of communal areas etc. Would councils think that landlords, whom they often treat quite badly, will take all the risks?
A tenant of mine recently made a malicious accusation about my rental house (there's always talk about retaliatory landlords and no mention of retaliatory tenants). The environmental health department completely took her side and then threatened me with a fine if I didn't do non-essential works within 10 weeks. I asked the council what was their policy on endangering workmen when dealing with abusive tenants - what insurance they had in place etc. if my plumber or electrician were attacked by this abusive tenant. They immediately backed down and said the work could wait until she had been evicted. But they took the tenant's side automatically and wrote in a threatening way to me. I think councils have got to change their anti-landlord cultures.

Reply to the comment left by "Ros ." at "05/09/2015 - 21:40":

The secret is to ask the council for a list of 'category 1' hazards and deal with them immediately. I must have done this a dozen times with my council and on every occasion there were no category 1 hazards (with the exception of the ******* tenant).