I have decided to adopt a policy of making myself a complete pain in the backside and try to create as much noise around this subject as possible. Not sure it will work but it’s better than sitting around waiting for the inevitable.
I have written to my local MP Caroline Dineage and have received the following response. I was wondering if anybody, who knows more about the subject than I do, could help me to fashion my next response to what I consider to be a bog standard misinformed piece of nonsense. I would like to go back with as much fact as possible to argue against each of her points. I can do the research and thinking on my own but 10,000 heads are better than one and wondered if anybody had any ideas or information that dispels the figures/information she is quoting?
I have also written to each member of the select committee on housing which met last week and will be responding to what I strongly suspect will be a very similar email reply from each of them:
“Thank you for your e-mail. I am very sorry for my error in sending a response to you regarding letting agent fees rather than mortgage interest relief. I have been receiving a great deal of correspondence on these two issues and inadvertently confused your e-mail with another.
As a former business-owner myself, I am passionate about helping small businesses thrive and fully appreciate your concerns about this policy proposal for the viability of your business.
The reason for these reforms is that the Government feels that the interests of the professional rented sector need to be balanced against the wider interests of the economy, including home ownership rates, a fairer tax system and mitigating against any future risks.
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’. I think it is important to note that maintenance and repairs, along with agents’ fees, legal fees, insurance, utilities, and service charges, are all still ‘allowable expenses’ and thus still tax deductible.
I appreciate you feel this could cause many private rental businesses to fold, but I would stress that less than 1 in 5 individual landlords are expected to pay more tax as a result of the restriction to Mortgage Tax Relief. Furthermore, I would assure you that this change is being introduced gradually from April 2017 over 4 years, giving landlords time to plan for and adjust to these changes.
While I appreciate you might find this response disappointing, I hope it goes some way to explaining the Government rationale on this issue.
Thank you once again for taking the time to write to me on this important issue.
Any guidance, info, statistics, quotes, etc. to make it harder to argue against us would be very much appreciated.