Further to our work mentioned in our previous blog on the issue, the NLA has continued work lobbying on the Budget to address the ‘unforeseen’ consequences, with the loss of mortgage interest tax relief being the major focus of the policy team since July.
There are small signs that politicians are waking up to the unexpected repercussions of these proposals. The trouble is some are doing it (probably on recliners) on various beaches across the UK, as Parliament is now in recess for the Party Conference season, meaning MPs decamping to Brighton, Bournemouth and other warmer climates for three weeks.
We intend to fight them on the beaches and we need your help
- Use NLA Lobby today and email your MP to tell them of the changes. This is especially important if your local MP is one of the Committee members on the Finance Bill, or you have property in their constituencies.
We’ve had hundreds of members lobbying their MPs so far with numerous MPs describing our briefing as ‘excellent’ and ‘top notch’.
- Tell us your views by filling out this anonymous survey.
The information we get from surveys such as these has already proved invaluable, and thanks to those of you who have completed them before, we can tell MPs the following:
- Currently, there are more than 204,000 private landlords who have BTL mortgages and are liable to pay higher rate Income Tax.
- Only 1 in 10 private landlords hold their properties in the form of a limited company.
- The Chancellor’s Summer Budget may push more than 136,000 private landlords with modest incomes into a higher Income Tax Band.
This latest survey includes questions which will give us more ammunition for the battles ahead.
Work, work, work
Before MPs went off on jolly holidays recess, the Finance Bill had reached Committee Stage. The tax relief proposals (or as they are more legalistically known Clause 24 relief for finance costs related to residential property businesses) are due to be debated on Tuesday 13 October, the day after Parliament returns.
This is MPs’ second holiday recess since the Budget, but we have been lobbying hard behind the scenes non-stop. We have been getting traction when we highlighted the ‘unforeseen circumstances’ of the changes that mean a large number of lower income taxpayers will be inadvertently moved into the higher bracket, people losing their benefits or personal tax allowance, and in some cases their whole livelihoods as previous profitable portfolios face making a sizeable loss based on non-existent gross profits.
The Treasury meanwhile are either unwilling or unable to answer parliamentary written questions the NLA have tabled about the ‘unforeseen effects’ of the Budget. You can see our questions and the Minister replies here and here.
If only they had consulted us we could have told them. We have circulated the handy infographic below to MPs showing what the current proposals would mean, as well as distributed a detailed briefing paper to MPs on the Bill Committee, which you can read here.
In short there is a lot going on, but much of it inevitably has to be behind the scenes. We appreciate this is frustrating to people who want to see and hear what we are doing, but it is often counterproductive to give a running commentary of our lobbying efforts in the media. Put it this way, if you were an MP looking to amend the Budget of the Chancellor, First Secretary of State and heir apparent to the Prime Minister, would you appreciate discretion, or your name being brandished about in the media by the very people you are trying to help?
What else is on the agenda?
Looking longer term there is much more sympathy amongst MPs for landlords in regards to Capital Gains Tax, which is seen as ripe for reform. This is a longer term policy objective of the NLA’s so that landlords are not taxed twice if they use the capital gain to reinvest in the portfolio (good business sense in most cases) and then are forced to sell later on. We fear this will be another ‘unforeseen’ consequence of the budget and we have a meeting scheduled next month with the Treasury to discuss our proposals.
MPs are also keen to support our calls for increasing choice for landlords as to how they run their businesses and whether to incorporate. We have highlighted the barriers to incorporation that landlords face, and are calling for a temporary exemption for landlords.
In the meantime we need your help to ensure that MPs get lots of holiday beach conference season reading. Use NLA Lobby to email your MPs and fill out our survey here. To coin another famous Churchill phrase ‘Action This Day’.
Meanwhile we will keep you updated on our progress as we fight the good fight.