Open Letter To Jane Ellison MP @JaneEllison

by James Fraser

14:45 PM, 7th September 2016
About 5 years ago

Open Letter To Jane Ellison MP @JaneEllison

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Open Letter To Jane Ellison MP @JaneEllison
Open Letter To Jane Ellison MP

Open Letter To Jane Ellison MP

Dear Ms. Ellison,

SECTION 24, 2015 FINANCE ACT (No.2)

I was exceeding pleased to see both Gauke and Osborne shifted from their positions and held high hopes for new thinking, preferably from people who could demonstrate a real understanding of professional landlords. Unfortunately it seems you are continuing to state the obvious falsities of your predecessor.

I note that you still claim only 1 in 5 landlords will be affected. Apart from surveys proving this to be untrue, (not to mention 146,000 pushed into higher tax brackets on no additional income), have you realised that ‘1 in 5’ is actually around 400,000 people? Had you further realised that these people were previously, in the main, supporters of the Conservatives?!

Since the 1 in 5 figure could not be justified by HMRC in a previous FOI request, one can only believe that no research was done and that the figure was unjustifiably plucked from thin air. Even if it were true, 400,000 tax paying, economically active people being forced into extreme tax rates or bankruptcy by the State is an utter disgrace that no Conservative would ever contemplate, let alone implement with glee. It amounts to nothing more than state-sponsored confiscation of private assets, the exact opposite of any Conservative ideology I have ever understood.

Worse than this, in your figures, how many tenants does 400,000 landlords represent? One million? Two million? More? If these landlords only had two houses, each with two tenants, that’s a minimum of 1.6m facing huge rent rises and most likely, eviction. How does this fit with Theresa May’s new ‘opportunities for all’ and the general claim that rents shouldn’t get any higher?

I’ve no idea who in the OBR thinks rents will not rise nor what evidence they have to support this view because they already are, and in countries where this nonsense has been flirted with rents have rocketed by up to 40%. The predicted climb in rents comes from a wide variety of sources across the country and includes my own actions, so please do not tell me it isn’t happening. Once the subsequent evictions start, many of these displaced tenants will be looking for state help with housing, and temporary accommodation will have to be provided at much, much higher cost.

It is beyond comprehension to me that anyone calling themselves Conservative could attack so many of their own supporters, potentially leaving them in financial ruin, whilst raiding the private sector to prevent an essential service! It is the worst embarrassment in a lifetime of being a Conservative, and needs an urgent rethink if a further housing crisis is to be avoided.

Sincerely

Cllr. James Fraser
Professional landlord

Leader of the Conservatives
Stevenage Borough Council

Comments

Appalled Landlord

22:07 PM, 5th October 2016
About 5 years ago

Reply to the comment left by "Appalled Landlord" at "07/09/2016 - 17:18":

I have exchanged further correspondence with the Treasury since my email of 7 September, above.

On 20 September, Nicholas Irvin sent me the standard letter that the Treasury has been sending out for well over a year now. .It included the following:

“We understand that some landlords, such as the landlord that you know, may face difficult
decisions regarding their properties. This is why the Government has chosen to act in a
proportionate and gradual way. Basic rate income tax relief will still be available on a
landlord's finance costs, the restriction will not be introduced until April 2017 and then it
will be phased in over 4 years. This gives landlords time to plan ahead of the changes.”

I immediately sent an email to Messrs Hammond, Gauke and Irvin, and Mrs Ellison, with the following question:

“If you consider a 78% reduction of net income to £10,900 - for two people to live on - and a tax rate of 83% to be proportionate, would you please advise me what you would regard as disproportionate.”

Today Mr Ryan sent the following reply:

“Thank you for your email dated 20 September. In the previous letter, the word ‘proportionate’ was reflective of the fact that the Government is phasing in the change to the tax treatment of finance costs for landlords. This change is being introduced gradually from April 2017 over 4 years.”

So I have sent the following email to Messrs Hammond, Gauke and Irvin, and Mrs Ellison:

"The word gradual in both letters can only refer to something that happens over time, in this case the phasing-in over 4 years. The word proportionate refers to a comparison of one thing with another. It is disingenuous to pretend that it means gradual, and the attempt insults my intelligence. The fact that both words are used in the standard letter indicates that they mean different things.

However, the pretence that the word does not have its normal meaning here is a clear admission that the Treasury has no justification for using the word proportionate in connection with Section 24. A tax rate of 83% is clearly disproportionate when compared to the maximum rate of 45% which will be applied to all other types of business. In fact, it is ruinously confiscatory. Do you not agree?"

Whiteskifreak Surrey

13:01 PM, 4th May 2017
About 4 years ago

Via my MP, I got a standard letter from Jane Ellison, who - in her wisdom - again talks about level playing field (with buyers of residential properties to live in).
Could any of the esteemed people here give me a few punch lines to demolish that idiocy? I will certainly be sending a reply.
Thanks a million!
WSF

Dr Rosalind Beck

13:19 PM, 4th May 2017
About 4 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "04/05/2017 - 13:01":

Hi Whiteskifreak.
I would ask for their justification in creating a very un-level playing field with the large Build to Rent providers of rental housing who are exempt from Section 24. And I would ask them to supply details of the additiional Government assistance, for example in the form of loan guarantees, to these institutions and also to publish which ones have donated to the Conservative party. I would also ask for their view of the Institute of Chartered Accountants of England and Wales' assessment that far from creating a level playing field, Section 24 puts a cliff edge in the middle of that field
There is also a section in my report which can be copied and pasted pointing out the idiocy of comparing properties rented out as a business (which are taxed becsuse they are businesses) with the non-business of living in your own home (where there is no tax levied on imputed rent).
I would stress that you want real answers to these legitimate and logical points and not a repetition of Treasury sophistry.

Whiteskifreak Surrey

13:49 PM, 4th May 2017
About 4 years ago

Reply to the comment left by "Dr Rosalind Beck" at "04/05/2017 - 13:19":

Thank you Ros,
very good points, I will certainly do that ! Will post here when / if I her back.

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