Happy New Year George Osborne!

by Readers Question

8:33 AM, 1st January 2016
About 3 years ago

Happy New Year George Osborne!

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Happy New Year George Osborne!

Well George, it’s that time again when you look back on the past year and forward to the year ahead.george

How was 2015 for you? You are probably feeling very pleased with your achievements. Your Conservative party was elected with an overall majority in the May election. Now there is no Clegg, Cable or other moderate Liberals to hold you back. You and your chum Dave are in full control, marching on with the policies that suit your political aims.

Free from the constraints of coalition, you didn’t waste much time in bringing forward proposals that were not in your election manifesto and were ruled out by David Cameron’s promise to the electorate that income tax would not be increased in this parliament. In your Summer Budget on 8 July, you put the boot into landlords with your Alice in Wonderland Tax which will prevent landlords offsetting legitimate business costs against profit. Despite the protests from landlords, the Institute of Financial Studies, Professor Philip Booth, the ICAEW and many others, no amendments were made to your proposal and you easily got this legislation through Parliament.

You really had it in for buy to let in 2015 didn’t you? In addition to removing the 10% wear and tear allowance, you also announced in your Autumn Statement that from April 2016, Higher Rates of Stamp Duty Land Tax would apply to the purchase of buy to let properties and second homes.

Your political priority is clearly to promote home ownership, but unfortunately you are forgetting those who can’t afford to buy and can’t access social housing. Can’t you see that your Clause 24 buy to let tax grab will not help first time buyers get mortgages? For years, successive governments have recognised the important role played by the private rented sector. What has changed George?

Looking ahead to 2016, what might be in store? Do you have other buy to let tax grabs up your sleeve to be announced in your March budget? Let’s hope not, as your existing policies are already perfectly adequate to achieve your objective of taxing most landlords out of existence.

We don’t have a crystal ball and so can’t predict what other surprises you will come up with next. We can however make a few predictions for 2016, based on the proposals you announced in 2015. Just for you George, here are our predictions:

  1. Your buy to let tax grab will result in rent increases as landlords will need to pass on their additional costs to their customers. Your buy to let tax grab will become known as ‘George’s Tenant Tax’ once tenants realise what has caused their rent increases.
  2. Homelessness will increase as tenants will be evicted by landlords who are forced to sell to avoid your buy to let tax grab.
  3. Local authorities will begin to realise what is going on when the costs they incur housing the homeless begin to increase. The owners of bed and breakfast establishments will be delighted as their rooms will always be full.
  4. From April, the housing market will begin to stagnate as your 3% stamp duty hike kicks in. Your housing supply targets will not be met as your policies are not encouraging investment in all tenures of housing.
  5. In the spring, your officials in HM Treasury will be very busy preparing to defend the Judicial Review of your buy to let tax grab. That’s right George, a Judicial Review! Did you really think you could get away with this absurd tax proposal? Did you think landlords would not fight back and defend their businesses?

We are raising funds to challenge you in court. Here is our fund raising page. It’s amazing what can be achieved when so many people feel aggrieved and are willing to contribute to a good cause.

https://www.crowdjustice.co.uk/case/clause24/

Well George, that’s about it from us. We do wish you health and happiness in 2016 but we do hope you will get some better advisers in 2016 than those you had in 2015. Happy New Year.

Jacob



Comments

John McKay

11:43 AM, 1st January 2016
About 3 years ago

I disagree that GO and the Conservative Party actually care that much at all about helping people on the housing ladder. This is all about tax take and vote grabbing. After all if the Tories were that concerned in home ownership then Brandon Lewis would be in the Cabinet - but he isn't.

http://saynotogeorge.co.uk/is-the-conservative-party-really-one-for-home-ownership/

BTL INVESTOR SCOTLAND

11:47 AM, 1st January 2016
About 3 years ago

I agree with Jacob's predictions for 2016.

Cosmo Anayiotos

12:21 PM, 1st January 2016
About 3 years ago

£45,000 fighting fund ! that is great news. but for whom is it great news ?
whether it is 45grand or 4.5million quids it's only 600 landlords that donated.

so what does this mean to G.O. ?
well, out of the 2,000,000 landlords only 600 don't seem to like his idea.
the remaining 1,999,400 seem to like it. otherwise they would have contributed to the cause. Obvious.

i did say we were far too fragmented and this just shows how weak we are.
if 600,000 landlords donated just £0.10 each the fund would be £60,000 yet have far greater clout because of the 600,000 voters involved.

something desperately needs to change.

stuart edwards

12:59 PM, 1st January 2016
About 3 years ago

Reply to the comment left by "Cosmo Anayiotos" at "01/01/2016 - 12:21":

Cosmo.....the judicial fund is nothing to do with how many people contributed....but whether or not the tax breaks European laws. It's about proving wrong is wrong.

Chris Byways

13:20 PM, 1st January 2016
About 3 years ago

The reason so few people support it is surely - Most don't know about it, or do not think it will happen, or effect them, or feel they can't change anything.

Back on 8/5/15 gov still seemed to encourage PRS.

https://www.gov.uk/government/publications/2010-to-2015-government-policy-rented-housing-sector/2010-to-2015-government-policy-rented-housing-sector
App9
"sector has grown and improved enormously in recent years and accounts for approximately 16.5% of all households, or nearly 3.8 million homes in England.

The private rented sector offers a flexible -form of tenure and meets a wide range of housing needs. It contributes to greater labour market mobility and is increasingly the tenure of choice for young people......"

Better statistics would help. How many will make a loss or zero profit by 2020? for example.

Guardian today
http://www.theguardian.com/housing-network/2016/jan/01/britains-housing-crisis-2016-2015-market-bedroom-tax
Finishes ........"cement this period as a moment of extreme economic and political stupidity in the face of all available evidence. Still, perhaps next year I’ll wish for a land value tax, as well."

But misses the real reasons.

KATHY MILLER

14:03 PM, 1st January 2016
About 3 years ago

Reply to the comment left by "John McKay" at "01/01/2016 - 11:43":

I agree hes after the votes of youth for the party . Political spin lets make the young think we care about their flight, get them on the housing ladder and then take it all back when they need care .

If it moves tax it.

Rachel Hobdell

15:35 PM, 1st January 2016
About 3 years ago

Excellent letter Jacob. Completely support this

Rachel Hobdell

15:37 PM, 1st January 2016
About 3 years ago

Reply to the comment left by "stuart edwards" at "01/01/2016 - 12:59":

Does it break European laws ? Does anybody know ? In which case we can win this battle

Mark Alexander

16:30 PM, 1st January 2016
About 3 years ago

According to this Oxford tax expert yes https://taxatlincolnox.wordpress.com/2015/12/29/could-state-aid-law-protect-buy-to-let-landlords/

It's heavy reading because it's tax and law from the perspective of a true boffin. I don't profess to understand the relevance of any of the cases he's United but I do like the beginning and the end of his article.
.

Chris Byways

16:56 PM, 1st January 2016
About 3 years ago

Heavy it definitely is, but he thinks only one Ground might possibly stand up, but the bar us high!

"It is under EU State Aid provisions however that the landlords might actually have a case. I’ve blogged elsewhere about State Aid Law (here, here and here) and am fascinated by what I see as an overextension of the law in the area. It might seem strange that a provision originally introduced to prevent states from intervening in the single market by favouring their own national undertakings and industries over others could be used to challenge (effective) tax hikes, but that is the strange direction that the law has been taken.
State aid arises,"

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