Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "07/10/2015 - 19:42":

Ross, I had 7 planning applications over a 3 year period, all refused by the Manchester City Council. I appealed all 7 decisions by employing a private planning consultant costing me the best part of £2,000 each application. I won all 7 appeals! This 3-4 years ago when builders were desperate for work. You work out the logic.

Reply to the comment left by "Jon Pipllman" at "07/10/2015 - 21:04":

May be , if pressure comes in from OO

David Gauke is a joker... He has explicitly stated that, it would be discriminatory to treat Higher rate tax payers more favourably than basic rate tax payers as they are able to claim 40 and 45% relief however I equally find his comment discriminatory.....wouldn't it be discriminatory that companies are treated more favourably than individual landlords where they are operating same business but having different tax treatment....where is so-called government's commitment to bring fairer tax system???

Based on what Gauke said, I am now less confident that, they will ever reverse their decision to reverse this madness.

I am now even less confident that they will spare a thought of applying this madness just to new borrowings.

They are more likely to go retrospective that's based on his recent barkings.

Bunch of Crooks.

Reply to the comment left by "Saeef Khan" at "08/10/2015 - 07:56":

Saeef.....The government doesn't give a dam about the little man. Indirectly I've been involved with a group that lobbied the government over ir35 for over 5 years now.....A tax that gives larger companies an advantage over the small company (sound similar?) The only result is that the government has turned the screws even tighter.

Reply to the comment left by "Jim S" at "07/10/2015 - 23:21":

Thanks Jim. How pathetic that you had to spend all that money. They should pay it back to you, because they were proven wrong. Ever thought about a small claim against them? (if you could be bothered - it would be interesting).
Apparently, Cardiff Council are turning down as many applications they can for change of use as they don't want the studenty area to have any more HMOs - and they're apparently doing this even before they rush their new regulations in. On the other hand, they are allowing companies to build new student accommodation in that area and in the town centre.
I believe it's the pressure the OOs put on the councillors in this area - they think they are morally superior because they own their own homes and in some cases maybe one or two adults share a house which could house 6 adults. I'm not saying they should sell their houses to the landlords (nice reversal of the Government's madness that would be, and far more logical than the crap behind clause 24) - as part of an environmentally-friendly housing policy - all the advantages you get from making better use of housing, lighting, heating etc. - but they could at least get off their high horse. It's anti-tenant rhetoric as much as anti-landlord - although they engage in both in the letters pages of the local newspaper. I've been in there now and then to have a pop back at them.
Kathy brought up the NIMBY factor very early on in this thread, and this is another kind of NIMBYism. Talking of which, James Coney in the Mail a few days ago wrote something on this - it was good because it was blaming existing OOs and their NIMBYism for the 'housing crisis.' They are, of course, desperate to keep their house prices high. It looks like the Government is intending to tackle this (at least they say they are) - that's the direction they should have gone in the first place instead of picking on home-providers (Kathy's idea to use this word and we should get it in where we can).

I have an appointment with my MP, John Penrose, tomorrow morning. In reply to my letters he has essentially just sent me the standard Treasury letter, lightly customised.

Could someone please help by setting out the main 3 bullet point arguments and point me at the most convincing comparison of the numbers before and after the change, to illustrate the way in which we could be taxed on a loss? I am minded to use the ones from the table that Ros used for her case of "Jim" on the 5th at 22.26. I could perhaps change it so that Jim has a standard rate of tax on his day job and 2 properties - that would make the contrast bigger and show the problem. I can't use my own case, because my mortgages on 7 props are very cheap, being base-rate or LIBOR tracker reversionary rates of 1.5 or 2% from pre-2007 and my trading business hasn't yet actually shown a profit for tax purposes.

As for the bullet points, my thoughts are as follows:

1. We can end up being taxed on turnover even if we make a loss, particularly if we have a modest day job too.

2. There is no fairness in the different treatment of incorporated and non-incorporated landlords as there is an any other business

3. It is impossible to incorporate because of ineligibility for Incorporation Relief of CGT and the rolling up of Stamp Duty in related transactions even if each property is cheap.

I have written to my MP 3 times now and even called his office, and still no response. I bet if I complained about a pot hole on my street I would have had a meeting already! Its a disgrace.

I asked Sir John Redwood MP if he had any advice for the landlord community on how best to lobby against clause 24, and he said -

"The issue that will weigh most is what impact could this have on the supply of homes".

Reply to the comment left by "Jerry Jones" at "08/10/2015 - 09:34":

Jerry, your bullet points are fine, might I suggest that you keep this very simple for your MP?
Such as HMRC are to change a 'business expense' into 'Taxable Income'
That means that for every £1 paid in any 'Finance Charge' you will lose the usage of £1 against your personal allowances and your income will go £1 more towards a higher tax band.

for example.
Business 1. Self employed Resteraunt owner
Makes £10600 profit after expenses , tax bill = £nil
Finance charges are £100,000 - no tax on this.

business 2. landlord, but is incorporated
makes £10,600 profit after expenses, tax bill =( 20%)£2120
Finance charges are £100,000 - no tax on this

Business 3. Landlord (self employed)
Makes £10,600 profit after expenses, tax bill. = £15,763
Finance charges are £100,000 - less 20% relief = £80,000 now taxable

Landlords tax relief is eaten up, he is a higher rate taxpayer now
and he owes HMRC £5163 more than he has earned in profit.
So his tax rate is now about 150%

Incorporated landlord has a tax bill of £2120

Self employed Resteraunt owner has no tax to pay

Does that help?

Reply to the comment left by "Gary Dully" at "08/10/2015 - 11:37":

Yes, I'll use that. Thanks. In fact, instead of a restaurateur, I'll make the first one a hotelier or B&B owner.