Treasury response to Section 24 report by Dr Rosalind Beck

so no change in budget then, cheers tory blikered privileged wallys

Reply to the comment left by “Sara Webb” at “17/11/2016 – 16:54“:

Hi Sara. Thanks for your contribution and obviously we are all furious at the ‘black is white’ attitude of the Treasury and the way in which the staff there have to regurgitate untruths. I would say in response to the letter:

1.Section 24 will not affect landlords with the largest incomes but rather those who owe the most in finance costs. How they can suggest that a large turnover in ones business means one has a high ‘income’ (they are implying that this is net profit) is downright dishonest.

2. Phasing it in over 4 years will not allow people to adjust – this is a euphemism for increasing rents, evicting, selling up and/or going bankrupt. Landlords have invested in most cases for the long-term and are often tied into mortgage agreements, CGT liabilities and so on from which it is not a case of simply extricating oneself.

3. IF it ‘only’ affects 1 in 5 landlords, we estimate that to be about 400,000 landlords and these are those who own the most properties. One survey estimates this means 4.6 million tenants. The Treasury is still refusing to say that even one tenant will suffer adverse consequences. This is ludicrous.

4. Case studies such as those in my report are not rare. I would like the Treasury to evidence that statement.

5. For the first time, the Treasury has acknowledged that this was tried in Ireland. They are incorrect when they say it was a more extreme version there because the first time it was implemented ‘tax relief’ was completely removed. In fact, it was a far less extreme version because it was not retroactive and only applied to new purchases. If it only applied to new purchases here, we wouldn’t be half as worried or affected; we would simply not expand.

If anyone else wants to add to this critique of their response please do so here.

Landlords with largest incomes!? My typical net profit is £50k with tax of about £9k. On same net profit tax will be £38-39k because my gross rents will be used to determine my income tax rate! So £11-12k per year for more than 50 hours a week (surely below the minimum wage!), and all the extra legislation making it worse and more costly! No wonder I had a heart attack in May! Then once interest rates go up I’ll be a bankrupt single parent! Worked up from nothing and never claimed a penny off the state, but looks like I will be soon!

Reply to the comment left by “Richard Turner” at “17/11/2016 – 17:24“:

I’m sorry to hear about your situation, Richard. The way we are being treated is an absolute disgrace.

I am a landlord that has never been a higher rate payer as I only make around 16k per year. However the new tax now means that tge whole lot will be taken for tax. , I will be a higher rate payer with actually no income and no access to benefits or child benefit. Plus most of the properties have no equity to sell them. I can’t be tge the only one.

Reply to the comment left by “Richard Turner” at “17/11/2016 – 17:24“:

Excellent, we can gain further income by prosecuting and fining landlords for paying themselves less than the minimum wage. Note to self, must alert Hammond. GO

Hi Jim! Good to make your acquaintance again in Edinburgh recently.

This letter stinks as badly as the others. It is wrong on so many levels. They still don’t understand schedule B taxation – odd for the Treasury, because if they did they’d stop banging on about homeowners and level playing fields. They also still think business costs are ‘relief’ when they’re nothing of the sort.

As for the rest… dont get me started. I think the most depressing thing is that there clearly isn’t going to be a review in the Autumn Statement so we can stop wishing for that now. They’ll only cease this nonsense once it’s blindingly obvious they’ve cocked up badly.

I notice they don’t say why Ireland has seen fit to unwind BOTH versions of its own idiocy! Funny, that.

Reply to the comment left by “James Fraser” at “17/11/2016 – 18:11“:

Totally agree James. Surely if it was as they say it is (to target landlords with the largest incomes) then a simpler way would have been to leave the interest relief as it is, but increase the income tax rates on rental income. That way a bit more tax on REAL profit and none of this nonsense!

I’m so far from “wealthy” that I’ve got factor in the effects on Child Tax Credits and my children’s student finance. Will the mortgage costs still be deductible for these means tested calculations?

Have they added the thousands of smaller landlords in my situation to the 1 in 5?

Hi.

Below is the rubbish is I had received after sending Dr s comprehensive report. Sorry, the paragraphs are a mess, It came in PDF did not know how to attach or copy here so scanned to word pad, copied and pasted. I sent this reply to RLA no response as yet. I have replied back to the author of this letter, no answer yet.

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HM Treasury

Correspondence & Enquiry Unit
1 Horse Guards Road
London
SW1A 2HQ
[email protected]
3 November 2016
Our reference: T02016/22989

Thank you for your correspondence dated 27 October to the Chancellor of the Exchequer
about financial cost relief for landlords. As it is not practical for Ministers to respond to all
the letters they receive, I have been asked to reply on their behalf.

It may be helpful if I explain the Government’s position. At Summer Budget 2015, the
Government set out a package of measures to reduce the budget deficit and rebalance the
economy. The Government wants-a http://www.gov.uklgovernmentlnews/changes-to-tax-relief-for-residential-Iandlords

The Government remains committed to supporting house building and helping first time
buyers onto the property ladder. Good progress was made over the last Parliament to boost
home ownership and supply: housing starts were at a 7 year high (2014-15 on 2007-8),
and the number of first time buyers rose by almost 60% between 2010 and 2014. This was
driven by a new National Planning Policy Framework, direct delivery of homes (with over
270,000 affordable homes delivered since 2010) and the Help to Buy schemes, which have
helped almost over 150,000 people on or up the housing ladder.

The Spending Review 2015 built on the progress made over the last Parliament.
Government announced that it will invest over £8 billion in affordable housing, continue to
reform the planning system and release public land for housing.

Thank you for taking the trouble to make the Government aware of your concerns. I hope
this reply is helpful.

Yours sincerely,
Tracy Webb
Correspondence & Information Rights Team
HM Treasury