9:49 AM, 2nd July 2024, About 6 months ago 38
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Imagine this, some time ago, you decided to try to improve your life and to make things better for you and your family.
You’re a hard-working person and your chosen profession was to become a private hire taxi driver.
To start off you need to buy a car. You couldn’t afford a shiny new one, so you bought a car that needed some work. No-one else would touch it and it was unlikely to be any use in it’s current state. You approached a loan company and borrowed enough to buy the car and do it up. You spent hours making sure it was clean, smart and attractive and you also paid the experts at your local garage to ensure it was safe and legal. They were grateful for the work as they are hard working individuals as well.
You want it to be comfortable and attractive to your passengers, so you go further than is required and make the inside really plush, all at your own cost in time and money. You pay for the required licenses and also begin paying a book-keeper and accountant.
You have been running your taxi business for a while, and then the government steps in because they feel your passengers are being badly treated and things need levelling up. (They also realise there are more passenger voters than taxi drivers). All taxi drivers are blamed for the state of the roads, congestion and the lack of cars available for use by the general public.
This works well for politicians because they can raise taxes in any way they see fit from the taxi industry and the voting public will be very happy to see it as they have been told all taxi drivers are evil.
You are told that you can’t choose which passengers you pick up, even if you suspect they will have trouble paying. The local council might pay the fare eventually (in a few weeks) directly to the passenger but it’s up to you to get it from them. In the past, you have lost a lot of money this way, but all taxi drivers must be rich so you should just ‘suck it up’. It’s all part of being a taxi driver.
You have had some bad experiences of passenger’s pets damaging your car and leaving it smelly and needing a full professional clean. You decide not to take pets anymore, but you are told you have to. Apparently, it’s not up to you!
If one of your passengers decides not to pay or to get out of your taxi you have to go to court to get it back. No one makes them pay in the meantime, and the system is so backlogged it takes 6 months for the court to finally let you enter your taxi again. It has been trashed and needs more work doing than when you first bought it. There’s no chance of getting any of these costs back from the passenger, but that’s all just part of being a taxi driver!
The Chancellor then steps in. He’s decided it’s not fair that you can count the interest paid on your car loan against your profits because someone with a personal loan for their family car doesn’t get any allowance against their tax bill. He puts a stop to that nonsense straight away and consequentially takes in a lot more tax in the process. He also thinks that because you have another car that you use for your personal use, you should pay extra tax when you buy your work vehicle and takes in a lot more tax again.
There are virtually no taxis owned by your local council and the few they have are in a very poor state of repair. You know yours is much nicer and better looked after than theirs, but you have to pay an outrageously priced fee every five years to the council who have employed some new people to check that yours is perfect. Once you have paid this fee, no-one turns up to inspect it anyway.
You have a passenger one night who is drunk and generally being obnoxious to members of the public. You try to throw them out of your taxi but you are told you can’t do this. You have to spend six months through the courts getting them out. You can’t make any money from your taxi during this time. The local police and council threatened you because of your passenger’s anti-social behaviour. It’s your fault another grown adult does not know how to act properly.
Then the Labour party win a general election. They have a great idea. They say when the time comes to give your car to your child, or you want to use it as your main family car, a judge will decide who would be most disadvantaged by you doing this, you or the passengers. If he decides the passengers would be worse off, you are told you can’t have your car back.
Although this all sounds ridiculous, it’s perfectly acceptable to treat landlords in this way. When will someone in power take the housing problem in our country seriously and build enough housing for everyone?
Stop blaming landlords for the failings of successive governments over many, many years and appreciate what we do to provide safe, decent accommodation to around 20% of the population.
We need support not more threatening legislation.
Thanks for reading,
Mark
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Tom Jenkin
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Sign Up16:31 PM, 4th July 2024, About 6 months ago
The utter failure to replace the social housing sold under the right to buy scheme has played a big part in the problems we have now .
There are a large minority of people renting privately who would be better suited in social housing and renting from the council or housing association.
When I started work 35 years ago, you rented for a cple of years and then you brought your first place ,very few people saw renting as a long term plan.
Now you have people who will never have the means to own there own home ,who can only just afford the rent as long as nothing goes wrong who should be in social housing.
We need a huge social housing build, not shared ownership or affordable homes but genuine social housing to move some of the pressures from the private rental sector.
Frank Dane
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Sign Up7:31 AM, 6th July 2024, About 6 months ago
Ok so … I agree. Howeverrrr landlords have effectively been demonized - as you point out
- and the only answer is - not to be a landlord because the only people listening to you are … landlords. People ‘want’ to punish landlords and they won’t want to stop doing so because it’s the easiest thing in the world to equate fairness with ‘other’ people paying more tax. I’ve thrown my passengers out in the street and sold my taxis … all of them because … you can’t hold back the tide with a broomstick.
Peter Merrick
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Sign Up19:50 PM, 6th July 2024, About 6 months ago
Reply to the comment left by Frank Jennings at 03/07/2024 - 12:35
Of course, it will be the fault of greedy landlords for NOT renting out properties and making tenants homeless by selling up and cashing in after committing the cardinal sin of forcing them to rent in the first place by buying up all the available housing and leaving nothing for would be owners. Really, the only thing that would stop the attacks is if we just handed over our hard-earned investments to councils and housing associations for nothing.
SimonP
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Sign Up20:01 PM, 6th July 2024, About 6 months ago
Reply to the comment left by JeggNegg at 02/07/2024 - 18:39
Note: For CGT purposes, a wasting asset is an asset with a predictable life of 50 years or less.
Per HMRC: "Any gain or loss on the disposal of a chattel which is a wasting asset is exempt from Capital Gains Tax unless:
(i) you have, or could have, claimed capital allowances for it
(ii) you loaned a chattel which had a predictable life of more than 50 years, such as a piece of jewellery, work of art or antique, to a business which then used it as plant"
Source: https://www.gov.uk/government/publications/chattels-and-capital-gains-tax-hs293-self-assessment-helpsheet/chattels-and-capital-gains-tax-2021-hs293
Natty
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Sign Up20:17 PM, 6th July 2024, About 6 months ago
It makes me wonder if this new government want to deliberately make things difficult for private landlords so they can go back to social housing and owner occupied properties only with limited private rentals back in the 50's, 60's and 70's era as they are now promising 1.5 million homes including social housing and abolishing right to buy on council homes.
Stella
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Sign Up22:34 PM, 6th July 2024, About 6 months ago
Reply to the comment left by Natty at 06/07/2024 - 20:17They will wreck the PRS they are trying to align the PRS with social housing and turn the clock back to pre 1988 housing act.
I cannot see how this will solve the housing problem it is a recipy for disaster.
Firstpower
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Sign Up14:01 PM, 7th July 2024, About 6 months ago
Reply to the comment left by Katy Ann at 02/07/2024 - 09:56
Have you Heard of capital gains tax the government gets even lot more money when you sell
Beaver
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Sign Up12:27 PM, 17th July 2024, About 5 months ago
Reply to the comment left by TheMaluka at 02/07/2024 - 10:30
I think that's probably right. Keir Starmer was criticised earlier this year for having a 'tax-exempt' pension scheme (from his time in the Crown Prosecution Service):
https://www.bbc.co.uk/news/uk-politics-65037136
At the moment the government seems to have decided that the state pension is a benefit rather than an entitlement, although there was an unsuccessful petition to try and stop this:
https://petition.parliament.uk/archived/petitions/121267#:~:text=In%20addition%2C%20the%20introduction%20of,provided%20through%20private%20pension%20arrangements.
What this petition was designed to stop is the situation where you contribute national insurance for decades in the expectation that you will receive the state pension, but then that is classified as a 'benefit' rather than an 'entitlement' that you've built up through probably several decades of national insurance contributions. If it's a 'benefit' rather than an 'entitlement' then the labour government might decide to means test it and not give it to you even if you have a NI record several decades long.
The way most private sector pensions are calculated by IFAs is that what you plan for to be financially secure in retirement is for additional income on top of the state pension (Like the State Second Pension but probably giving a better return). If the government pulls the rug out from underneath you just as you are approaching retirement and when you have little chance of rectifying the situation you would; (a) have been impoverished in retirement, despite your thrift and proper planning, because of an arbitrary decision; (b) you would have been robbed of your financial security; (c) punished for doing the right thing.
This debate has happened in the past and where it has always ended up is that there is no point in means testing the State Pension because if your total income pushes you into the upper tax bands then you are taxed at a higher rate and some of it is clawed back anyway. If somebody in government decided not to give it to you despite your decades of NI contributions that would be profoundly unjust; it would be state-sanctioned robbery.
However, if you were in the private sector (i.e. the majority) it would be unjust in more than one way than one. Public-sector pensions are typically defined benefit schemes schemes rather than defined contribution schemes. They are a benefit, paid for by the state. There is a debate going on at the moment about Rachel Reeves potentially clawing money back from private sector defined contribution schemes via inheritance tax:
https://www.msn.com/en-gb/money/other/rachel-reeves-urged-to-launch-2bn-inheritance-tax-raid-on-pension-pots/ar-BB1q5voG?ocid=msedgntp&pc=U531&cvid=4621e5d9663c4408b5c03681f44f1a28&ei=5
For many people, in order to plan for a secure (and probably not a lavish retirement) they have invested in BTL properties to supplement their retirement income. They have already been punished for doing that if they only own 1-2 properties because they are not permitted to claw back all their finance costs, even though big BTL businesses can through incorporation. Even people in the public sector have done this to supplement their retirement and be less dependent upon the state.
The majority of people in the UK either run small businesses or are employed by them. The people that run small businesses are often dependent upon entrepreneurs relief or other CGT tax breaks upon sale of their businesses as during the time they are running their businesses they are not able to make big pension contributions. Only about 6 million people work for the public sector; these people have a relatively generous pension, job security and little risk. They are a privileged minority.
If the labour government decides to tax private pensions more aggressively and treat the State Pension as a benefit rather than an entitlement then it needs to recognise that Public Sector Pensions Are A Benefit not an entitlement as well.
Plenty of people in the public sector have invested in BTL to supplement their pensions. This is a socially useful activity but small portfolio landlords have been punished for doing it. If Rachel Reeves attacks the State Pension and Private Pensions she also needs to tax Public Sector Pensions more aggressively as well, e.g. by means testing them and taking them away, including all or part of Keir Starmer's tax exempt pension from the Crown Prosecution Service.