Open Letter To Jane Ellison MP @JaneEllison

Excellent letter, Jamie. The problem is that the people running the country don't have the expertise or knowledge needed to perform their tasks and they are unwilling to listen to the experts with that know-how. It's a shambles. Let's hope one of them realises this sooner rather than later and before too much damage is done and starts listening rather than putting their fingers in their ears and repeating nonsense ad nauseum.

I sent this to the new David Gauke, aka Jane Ellison, following stupid, ignorant comments in Parliament yesterday. If anyone else can send her a brief note about this 1 in 5, that would be great, as it would have more impact. You should put it for the attention of Jane Ellis and send it to:

public.enquiries@hmtreasury.gsi.gov.uk

You need to also give them your address and telephone number. My email is as follows:

Dear Ms Ellison

I read with interest your comments about 1 in 5 landlords being affected by the decision to disallow finance costs for ‘private’ landlords’ businesses. I’m afraid that the statistic you quote, apart from being extremely speculative, is meaningless – as much as you may not mind 20% of landlords’ businesses possibly going down the pan, by the nature of the change, it is landlords with large portfolios of properties who will be most affected. The Treasury needs to commission some work on this immediately, as it is quite likely that around 80% of rental properties will be affected (think: Pareto Principle).

Unfortunately, you are making the same mistake as your predecessor in repeating the falsity that this will not have a great impact on the private rental sector. As a portfolio landlord myself I have already increased rents in anticipation of being taxed on a profit I have not made (how can money I have paid to a mortgage lender, who financed my housing business be called my ‘profit’? It’s bizarre). Previously I very rarely increased rents – like many other portfolio landlords I preferred for the business to just tick over and didn’t chase every penny. This has now changed and what is true for me is true for many. Landlords will have to keep increasing rents to hand over this tax on turnover.

How a Conservative Government could introduce this hard-left policy is incredible (in case you are not aware of this, George Osborne took the policy from the Green Party Manifesto and it had already been thoroughly rubbished by Professor Philip Booth at the Institute of Economic Affairs). Attacking one group of business people like this, who have taken risks to develop an essential service and also to provide themselves with an income and pension, is a shameful move by the Conservative Party. It will only have ill effects and exacerbate problems in the housing supply in this country.

I beg you to take heed of my words and begin a re-think on this (unless you feel you have to slavishly follow the absurd policies of your predecessor David Gauke and George Osborne’s ill-considered and ill-thought out war on buy to let).

Yours sincerely

Dr Rosalind Beck

Reply to the comment left by "Dr Rosalind Beck ." at "07/09/2016 - 17:02":

I’ve sent the email below for the attention of all three. I wonder if I will get the information I requested.

FAO Jane Ellison, David Gauke, Philip Hammond re the OBR’s endorsement of the Treasury’s assessment of the impact of Section 24

Dear Ms Ellison

In the House of Commons yesterday you said it was worth noting that the Office of Budget Responsibility had endorsed the assessment that “only 1 in 5 landlords are expected to pay more tax, we do not expect this to have a large impact on either house prices or rent levels due to the small proportion of the housing market affected”

The OBR was created by George Osborne in 2010. The three members of its Committee were chosen by George Osborne. I would like to know, please, what work the committee did in order to arrive at that conclusion, in support of the tax that George Osborne announced without any consultation, given that:

the National Landlords Association’s research showed that 600,000 landlords would have to exit the market,

the Institute of Chartered Accountants in England and Wales said that “It is likely that landlords will increase their rents to compensate for the loss of tax relief and the number of rental properties may decrease”,

when interest was disallowed in Ireland between April 1998 and December 2001, rents went up by nearly 50% and

sheer common sense says that if you impose a tax on something, it will be passed on to the end user.

Kind regards

And I sent them some real figures, to make a change from their made-up ones.

FAO Jane Ellison, David Gauke, Philip Hammond A real world example of the effects of Section 24

I attach a spreadsheet showing the figures of a landlord I know who has given me permission to send it to you. The tax calculations are correct but the percentages at the end are not worked out in the conventional way, so please ignore them.

At present, her rental profit is £65,000, and she has no other income. In 2020/21, if all her rent receipts and costs, and therefore her real profit, remain exactly the same, her taxable profit will be deemed by HMRC to be £220,000. Her tax will go up by 256%, from £15,200 to £54,100. This will be 83% of her real profit.

The net income, which she needs for herself and her daughter to live on, will go down by 78% – from £49,800 to £10,900. Could you live on that?

She will not be entitled to any benefits, because of her income will be deemed to be nearly a quarter of a million.

To maintain her after tax income of £49,800 she will have to increase her rents by 33% between now and March 2020. Not that she will be any better off herself from this.

Thanks to this tax, her economically and socially beneficial business of housing poor people has been undermined, and she faces bankruptcy unless she sells up or increases the rent.

There are many other landlords facing the same fate. Some cannot sell because of negative equity. If they cannot increase rents by substantial percentages, HMRC will bankrupt them, and they will have nothing to show for years or decades of work. Many of them were hitherto the natural supporters of your Party.

I do not think that Section 24 is proportionate, contrary to the claim made in the House of Commons In July 2015, and again yesterday.

Kind regards

The problem is, due to the dire state of the Labour Party, the Conservatives do not need the landlord vote. And I say this as a portfolio landlord and a former Tory voter. Instead they are after disaffected labour voters who will love them beating up us nasty money grabbing landlords. And such voters will not blame the Tories when their rents go up. They will blame us.

Reply to the comment left by "Gary Nock" at "08/09/2016 - 07:30":

I agree, Gary. I honestly think politicians across the entire spectrum don't care at all about the people of this country. I think they are more concerned about things like how they come across in their next speech, how they 'beat' their political competitors, whether they'll be caught out with some shameful thing they're doing in their private lives (eg related to sex or taxes) and whether they'll get in with the powers that be and maybe get a promotion, meaning that they will get even more of the attention they crave. When we communicate with politicians and with chief execs of 'charities' etc., where they also behave completely like politicians (it's how they got to the top), we have to know this. I've always been gullible and naive - when you're not a liar for instance, you don't assume others are lying. Basically, I think we're dealing with a load of snakes. But this is of course just my opinion.

I sent this

NW Landlord says:
Read about me on my member profile
07/09/2016 at 14:12
Not sure if it will help but sent this sick of these politicians speaking the same total crap and lies

Hello Jane

Further to your comments in parliament yesterday stating that only 1 in 5 landords will be affected by the reckless and unfair policy by George osbourne.

I would like to know where you are getting that figure from as I know many portfolio landlords who are going to be ruined by this policy seeing tax bill going up be as much as 200%.

How can it be fair that I am taxed on money that has been paid to a lender to finance my business. Myself and my business partners provide high quality housing to the less fortunate in society to the tune of hundreds of families if fully implemented and we stand still we won’t last a year come 2021 as tax will be far greater than the profit we make ie financial Ruin how can this be fair and ok ? How can it be legal ? It is nothing short of a disgraceful sabotage of hard working business people to satisfy public opinion of our sector which is often miss guided at best ? The only other reason I can see is it is a school boy error that needs rectifying before we see carnage of epic proportions.

The only choice we have is to evict and stop letting to housing benefit / universal credit and focus on Eastern European workers ( of which there is strong demand )who will have the capacity to pay increased rents so I can pass them onto you to satisfy this ludicrous theft by your government

One question where will all these families be housed ? The council ? Don’t think so and I am talking about 100s of families within one post code ? Replicate this around the country and you have a crisis on your hands as it is portfolio landlords who will be hit hardest, the more borrowing the more tax ? Crazy / bonkers doesn’t cover this policy

I urge you and your colleagues to really study this Ill thought out assault before it is too late and lobby the current chancellor to see if he actually knows what he is doing as you are sitting on a ticking timebomb that is totally unnecessary and plain wrong

Feel free to respond and I will give you some workable examples including my own to show you just how bad and worrying this policy it is the stress this has caused me and my family has been immense

Sincerely
Steve Oneill
NW Landllord

Well done Steve. Whether or not these cloud cuckoo land politicians will listen is another story. Clause 24 is a very crafty and devious tax devised by a snake designed to wipe out the landlord species and make us extinct. Unless of course you are a Tory donor with paid for rental properties and then it doesn't bother you does it?

The maths behind it took me days to get to grips with and then the penny dropped. I will be taxed on the money I pay to a lender. Not income. So how can we expect our tenants to understand? Well I wrote to all mine in very simple terms and told them that the reason their rents will be going up is because of the above.

I think Teresa May is possibly the person to sway (not Hammond, not Gauke, not Ellison) - if only we could get to her. She makes an implicitly positive statement about landlords here:

https://www.theyworkforyou.com/debates/?id=2016-09-07a.323.3&s=landlords#g326.2

Reply to the comment left by "Dr Rosalind Beck ." at "07/09/2016 - 15:01":

That's a long-winded description of Morons