Surely I am not the only landlord worried about new EPC requirements?9:44 AM, 17th February 2021
About 2 weeks ago 125
The 2015 Conservative manifesto included the following pledge: “We will commit to no increases in VAT, National Insurance contributions or Income Tax”. To see a copy click here
Not everyone read it at the time, but very few people could have avoided seeing David Cameron on television on 29 April 2015 pledging that there would be no increase in income tax: click here
The Guardian printed the related press release that morning: click here
It stated: “David Cameron will pledge to introduce a new law within the first 100 days of a Conservative government to prevent any rises in income tax, VAT or national insurance in the next parliament.” And “In a keynote speech, designed to be one of the highlights in a week of Tory campaigning on the economy, the prime minister will say on Wednesday: “This is the clearest choice on the economy for a generation. And beyond the plain facts, it also comes down to gut instinct. When you’re standing in the polling booth, ask yourself: on the things that matter in your life, who do you really trust?
“When it comes to your tax bill: do you trust the people who taxed you to the hilt when they were in power and still haven’t come clean about the taxes they want to increase next time round? Or do you trust the Conservatives, who have cut income taxes for 26 million people and who will cut your taxes again next time?””
These were excellent questions.
This week Philip Hammond broke the promise by announcing an increase in NI contributions for the self-employed. This resulted in a media onslaught and several Tory MP’s spoke out against the breach of promise which would increase the NI deduction by 1% of someone’s income. The Daily Telegraph’s deputy editor Allister Heath described the move as an unforced error.
However, there has been a deafening silence from MP’s over the first breach of promise – which was announced a mere 10 weeks after Cameron made it on TV.
In July 2015 George Osborne announced Clause/Section 24, restricting the deductibility of mortgage interest for landlords who bought properties in their own names. This means that many will pay tax on a fictitious amount of profit with effect from April 2017, increasing their Income Tax.
The result of the NI increase for a self-employed person earning £50,000, according to Patrick Collinson’s video in the first article above, will be an increase of £500 a year, or 1%
Whereas Section 24 will more than triple the tax of one landlord that I know, and leave her without enough to live on, as described on page 12 of Dr Beck’s report: click here
She will not be entitled to any benefits though because of her fictitious income!
She will have to pay an extra 60% of her income in tax because her tax rate will go up to 83%. This increase will be 60 times as big as that resulting from the NI increase, but Tory MP’s have kept silent about that, despite the complaints they have received from taxpayers for the last 20 months.
Dr Beck’s report describes how, in order to be able to pay the extra tax and prevent bankruptcy, the landlords with the most properties have to increase the rents they charge, often for the first time in years. As tenants on capped benefits cannot afford the increases, they are being evicted and made homeless. Councils have to put them in “temporary” accommodation at greater cost.
Homelessness is going to increase enormously due to the breach of promise that is Section 24. It will be an unforced disaster, not just in terms of the human misery of the extra homeless, but in the economic lunacy of paying more to accommodate them in hotels and B&B’s.
But where is the media uproar? Where are the objections from Tory MP’s?
And where are the objections from Opposition MP’s for that matter?
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