Today I launch my comprehensive report on Section 24 of the Finance (No. 2) Act 2015

Thank you, everyone involved in putting this comprehensive and yet very readable report together!

My electrician put his finger on the massive underlying issue when, in a discussion of the measure, he said "What's next? Are they going to start taxing me on the cost of financing and running my van?"

Reply to the comment left by "Steve Hards" at "29/10/2016 - 13:08":

Excellent idea! You can see how this section 24 nonsense could escalate to all businesses.

Huge thanks the Ros et. al. for recent splendid report. I know how much effort has gone into its production.
I am sending it to 2 MPs with whom we are yet to meet but am concerned it will fall on deaf ears. Unfathomable!
One is Kenneth Clarke who in his written reply to us has stated ” I must warn you that I am not instinctively in favour providing tax relief on interest on any debt, although we are hopelessly stuck with these arrangements for a large amount of business investment …………I will of course follow the continuing debate and await the outcome of the legal challenge that has been mounted”.

He generally talks about "the trouble with housing" and refers to the discrepancy between the "tax relief" given to landlords v owner occupiers.

Any advice as to how best re-educate in approx 15 minutes?

Chris.

Reply to the comment left by "Chris Novice Shark Bait" at "30/10/2016 - 10:12":

Hi Chris. Firstly I would say to him that the IFS and the Institute of Chartered Accountants of England and Wales, amongst others, have pointed out how wrong this tax is. I would then refer him to the article I am pasting below and/or extract the quote I got from Professor Philip Booth of the Institute of Economic Affairs, who, together with Paul Johnson from the IFS appeared in front of the Treasury Select Committee to point out how wrong the tax change is and how the arguments about owner-occupiers versus landlords don't stack up.

https://www.property118.com/professor-speaks-out-against-landlord-tax-grab/83048/

I would say that to say landlords receive tax relief is a misnomer - that we simply deduct costs to arrive at profit. I would ask whether he thinks it right that we be taxed on profit but not be allowed to offset the costs of creating that profit. I would also point out that without the input and hard work of landlords over recent decades commissioning new-builds, renovating decrepit housing, converting commercial premises and so on, there would be much less housing available and a far worse housing crisis. You might also say that the Irish tried this experiment and are now abandoning it as it has made the homelessness problem much worse.

Obviously there are loads of arguments, but I think you should focus mostly on the 'it's not a tax relief, it's a normal business cost' (it is for other home providers so why not for us etc) and also on the false comparison between landlords and owner-occupiers. There is a lot of material on this in my report. You might also want to give him the table in Section 19 as it shows graphically the unequal treatment of different housing providers and how extreme the differential treatment of unincorporated landlords with finance costs will become. Again, ask him if he thinks this is fair? I went to a Welsh Tory policy forum yesterday and there was a lot of talk about the need for 'fairness.'

If you do get to see Kenneth Clarke let us know how you get on. It is excellent that you have had a reply off him so if you can engage him a bit more and let us know how you get on that would be great.

Thanks Rosiland,

I was just attempting to precis your report and hoped you could do it better than me. Your comments are helpful and appreciated. I certainly will give this my best shot fully armed and report back.

I last had dealings with K.C. over the WB tracker hike. The argument then was we had no consumer protection because we were a business. George Osbourne was consulted to help him make this observation. The letter is pathetic really but quite revealing. I will sneak in the fact that actually we won that one. Now we are individual investors expected to shut up shop and go and gamble elsewhere, or perhaps visit gambler's anonymous and seek help!

Let's all keep up the pressure.

Chris.

Reply to the comment left by "Dr Rosalind Beck" at "30/10/2016 - 11:57":

Thank you Dr Beck for your sterling work in co-authoring the excellent Section 24 report and also for your incisive counter-arguments to MPs' standard, trotted-out defences of the legislation.

For what it's worth, I have emailed a copy of the report to George Osborne as I am still so incensed by his arrogance and stupidity.

My email ends "I urge you to read the attached Impact Analysis and to privately admit the folly of your Summer Budget 2015 statement. Thankfully you are no longer required to defend and implement this policy as Chancellor; however please desist from supporting it if called upon to comment."

I feel slightly better for having done that! However, I notice that posts confirming that the report has been sent to other MPs seem to have dried up - is it possible to raise the profile of your original post on the site so that more members will be motivated to send out the report and let us know to whom they have sent it?

Thanks.

Reply to the comment left by "Tatton Landlord" at "02/11/2016 - 09:58":

". . . . as I am still so incensed by his arrogance and stupidity."

Arrogant yes but stupid? Osborne now earns more from an after dinner speech than most landlords earn in a year - before tax!

Nevertheless I share your feelings.

I promised to report back when I had met with Kenneth Clarke which happened yesterday. Prior to the meeting he had been sent the tenant tax circular, a letter from me countering his initial warning letter that stated that he “was not instinctively in favour of providing tax relief on any interest debt!”
I also sent him Ross’s report in full and a full on 8 page document as to how my partner and I would be affected differently (we have 8 X 50:50 BTL properties and I have 3 in my sole name. Her part time teachers’ income is £6,000 less than my retirement income). I made strong reference to our tenant’s positions, emphasising the duration of tenure, with examples of duration min the 5 -10 yr. bracket. I have offered to sell to some and they have declined the offer.
He was running late in a busier than usual surgery. I have had occasion to visit before and learned that it is tricky to get your point across because he appears to do more talking than listening.
This time was just as frustrating!!
I started by asking if he had read our correspondence which included Ross’s report in full and he stated he had. His secretary had suggested he should look at it. He said he had read it the night before, normally preferred to read a book, but was used to having to sort out red boxes etc.
He had read everything prior to all participants in today’s surgery and ours was the most voluminous. A not surprisingly disarming open gambit! It became apparent that any scan reading he might have attempted did not acquaint him with many of our arguments.
Hard to get a word in edge- ways. He is a master politician with 2 law degrees from Cambridge, ministerial posts as Chancellor, health minister, Justice minister e.t.c. and has had his hat in the ring for P.M. Recently he has written his memoires.
So in the limited time available he significantly said that:
I have read all the correspondence, but of course I don’t agree with it but it is a good Lobby.
I will follow the debate but at present I don’t think many M.Ps are picking up on this as a problem.
There is little chance of it being reversed in the Commons. I have no idea what the labour party think about it but they will not back your position. BTL landlords are preventing 1st time buyers from buying homes and that are a real social issue.
This whole BTL thing has been gathering momentum for far too long. It should have been stopped long ago and George has sorted it. It is not the only reason that house prices have gone out of control but it is a contributing factor which needed to be addressed.
In the limited time available we came to our plight. After 11 yrs of hard work, setting up our portfolio under GAAP, we are to be robbed of £170K carry forward losses, spent to revitalise poor standard properties, now forced to sell to avoid bankruptcy at a time when our exit strategy is being dictated by the government and feel justifiably robbed. Reply, nothing but a noticeable wry smile.
I managed to say (after he had offered nothing) that our problems and our tenant’s problems would evaporate if this legislation simply became prospective and not retro-active! That seemed to penetrate, and he wrote something down in his notes.
As I said we would give it our best shot, and did. I came away disappointed but not surprised and went straight to a local pub for lunch and liquid refreshment.

Reply to the comment left by bjinldn bjinldn at 26/10/2016 - 12:09
The reason the Government hasn’t done that is because that will cost money, you should all be under know illusion, this has been done to raise exchequer revenue in the short term and stop the housing market overheating in the long term.

Michael TUCKER