Clause 24 response from Tim Loughton MP

by Readers Question

10:12 AM, 28th September 2016
About 3 years ago

Clause 24 response from Tim Loughton MP

Make Text Bigger
Clause 24 response from Tim Loughton MP

This is the response I received from my local Conservative MP from East Worthing, who obviously is another one who doesn’t understand the Bill and its implications:tim

Dear Mr…

Thank you for contacting me about changes to the taxation of landlords.

I am passionate about helping small businesses thrive. But this needs to be balanced against the interests of the wider economy including home ownership rates, a fairer tax system and mitigating against any future risks.

The Bank of England outlined two risks from high and rising levels of household indebtedness: a direct risk to UK banking system, and an indirect risk to economic stability. The Government is working hard to restore this country’s economic stability and the measures you talk about will help achieve this. With the above in mind I think it is right that the Government restricts the tax relief that landlords of residential property can get.

The current tax system supports landlords over and above ordinary homeowners, with tax relief particularly benefiting wealthier landlords with larger incomes. Every £1 of finance cost they incur allows them to pay 40p or 45p less tax.

The Changes to Mortgage Interest Relief do not tax landlords on turnover as opposed to profit. Rather, they remove mortgage interest from what is qualified as ‘allowable expenses’. Maintenance and repairs (along with agents’ fees, legal fees, insurance, utilities, and service charges) are all still ‘allowable expenses’ and thus still tax deductible.

Changes to Stamp Duty Land Tax are part of the Government’s strategy to improve home ownership. It cannot be right that in many areas local people are being priced out of a home. Many second homes are cash purchases that aren’t affected by the restrictions on mortgage interest relief; and many of them are bought by those who aren’t resident in this country.

Less than 1 in 5 individual landlords are expected to pay more tax as a result of the restriction to Mortgage Tax Relief. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.

Thank you again for taking the time to contact me.

Yours sincerely

Tim Loughton MP
Member of Parliament for East Worthing & Shoreham


Hamish McBloggs

19:12 PM, 3rd October 2016
About 3 years ago

Dear Tim,

Your words are similar to the Government's formal response to a petition I signed a while back. No new information.

Do you know if the plan was to make it such that only institutional landlords will be allowed and individual entrepreneurialism legislated out of existence?

Have you read any Learned discussion or other peer (academic) reviewed source which adequately explains the objectives of the change and how it 'keys' with other tactics to form the overarching strategy to resolve housing problems? I am certain I would have come across a dissertation somewhere that would explain it. Perhaps there are deep and meaningful documents on the Chancellor's desk somewhere. Can you ask him?

I am certain that if there were a cohesive strategy then it would have filtered through to Luddites like myself by now. You never know, there's a possibility I could agree for a greater good.

It seems (my non peer reviewed point of view) that the 1 in 5 who see rising tax bills are forced to consider their options and the number of properties 'released' by those forced to opt out of land-lording is probably less than the number of 'new' homes required. So that's not the tactic.

I am confused. Mark Carney's note that the number of private landlords is such now that a mass sell off would be bad for the economy seems to have been ignored by George Osborne whose introduction of the tax suggests he wants to promote a sell off.

But I 'feel' that there is a significant number out there who believe landlords are the cause of the housing market problems and that there has been no conscious attempt by Government to balance the view. We are money grabbing capitalist ne'er do wells and Government are making the change for a vote rather than part of strategy.

So, armed with nothing more than a calculator and a bottle of wine, we did our sums and took ourselves outside your equation and became one of the 4 in 5. The next move would be to incorporate. We can then become a faceless unfeeling institution such as your own personal mobile phone provider. An institution who will be compassionate to the limits prescribed by legislation and no more. We would then excommunicate your 'service' if you failed to pay. Letters would follow promising debt collection and finally we would shift bad debt off the balance sheet by selling it. The new company would work meticulously to provide a service for a payment or eviction. We could probably get quite slick at it.

As a human landlord (I suspect most of us are) we work tirelessly to help and support tenant's. From teaching basic financial management because they have no idea, cutting significant slack when life hiccoughs, rarely increasing the rent, supporting job applications, accompanying visits to benefits offices and CAB's in a supportive role, taking deposits over years rather than up front or eventually sometimes not at all, trusting the words of individuals and taking massive risks without any support from you.

I have my own children to look after.

I will no longer be the back stop for a failing welfare and education system and I don't understand the tax or the intended consequences.

I suspect that neither do you.



Chris Clare

9:35 AM, 4th October 2016
About 3 years ago

Reply to the comment left by "Old Mrs Landlord" at "03/10/2016 - 18:10":

Apologies I did mean to say "shift" fat fingers and all that or was it a Freudian slip, who knows.

Chris Clare

9:41 AM, 4th October 2016
About 3 years ago

Getting the thread back on-topic, it appears that the various responses people have received are clearly the party line with little personal thought on the part of the MP or official who has sent them.

Perhaps everyone should write back and confront said author with the evidence of their plagiarism and ask what is their personal view or standpoint.

Not that they will change their stance but worth a try to show we are concentrating. If doing this it might be worth having some succinct bullet points on where their arguments fail, nothing too long as it is clear they don't really have much of an attention span.

Don Lamb

13:18 PM, 13th October 2016
About 3 years ago

Reply to the comment left by "Gary Nock" at "28/09/2016 - 10:25":


I have just read on another blog that the Irish Govt have decided to withdraw their own form of Tenant Tax using Section 24 as it has been used for the last 3 years and they have realised rents have gone up by 50 per cent and development has shrunk. They will phase out re instating 80 per cent of mortgage tax relief immediately then the remainder at 5 per cent each year after.

This MUST make our useless Government realise the games up !!

Mark Alexander

14:42 PM, 13th October 2016
About 3 years ago

Reply to the comment left by "Don Lamb" at "13/10/2016 - 13:18":

This isn't new news.

Please see

UK Government are not prepared to consider the Irish experience.

If you read the linked article above you will see why s24 in the UK is so much worse than the Irish s23.

1 5 6

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?



Message To ALL Mortgage Brokers

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More