It’s not been the best of weeks for landlords. First of all, as Steven Glicher accountants mentioned in an earlier article in August, landlords were specifically targeted by Chancellor, George Osborne, in the Summer Budget as part of his strategy to “level the playing field” between renting and owning. Now, it appears, any lingering hopes landlords may have held have been quashed by the government with the announcement that they will not be allowed to force an emergency debate in parliament under the online petition rules. So what exactly is going on?
Well, in the Summer Budget, Mr Osborne announced several measures which directly impacted on the livelihoods’ of buy-to-let landlords: firstly, the removal of the wear and tear allowance, and secondly new restrictions to tax relief on mortgage interest, which would see mortgage relief withdrawn over a 4 year period from 2017 to the basic cap rate by 2012/21. Unsurprisingly the new proposed measures were not greeted favourably by buy-to-let landlords, and the group vowed to take action to fight the proposals.
Landlords therefore launched the ‘Say No to George’ campaign’ to force a one-off parliamentary debate on the issue. Through an online petition launched just over a week ago, landlords launched a motion to reverse proposals announced in the Summer Budget to restrict the tax relief landlords can claim on property finance costs to the basic rate of income tax. It certainly gained traction, as accountants knew it would. In fact it secured over 27,000 signatures in just over a week.
What did the petition ask of the government? Well, it stated:
“We operate as sole traders and incur costs in the course of running our business.”
“The planned restriction will unfairly target us by preventing us from offsetting costs in the same manner as other sole traders. We [therefore] ask that the planned restriction be reconsidered as it has unfair implications.”
Normally online petitions require 100,000-plus signatures to be considered for a parliamentary debate. As the petition had not reached the necessary levels, the refusal by government to call a debate was therefore hardly unexpected. So it came as no surprise that the recently-formed petitions committee has now told the group it will not recommend that the buy-to-let petition go further.
Was a lack of necessary signature numbers the only reason the petition was rejected? Well, actually no, it wasn’t. The committee discussed a range of petitions at its inaugural meeting on 8th September and noted that as the issue of the buy-to-let petition was in the Finance Bill and was already being debated in the House of Commons, an additional petition could not be accepted. Any petitioner could, the petitions committee argued, write directly to the Public Bill Committee to air their views, and could follow the Finance Bill debate in the House of Commons.
Since that decision any petitioner signing the ‘Say No to George’ campaign has received an email stating?
“Because the issue is currently being looked at in Parliament, the petitions committee decided not to take any further action on this petition. This Bill will be looked at by a Public Bill Committee – a group of MPs who go through a draft law in detail and debate it. The Public Bill Committee can receive views from the public now.”
If you are a buy-to-let landlord and are worried about the changes proposed in the Summer Budget, then give Steven Glicher accountants a call. We can discuss how the changes may impact on your tax position, and therefore your cashflow. We can also review your affairs and help you structure them in the most tax-efficient way that suits your needs. For further information call Steven Glicher accountants on 0161 4858007 or email firstname.lastname@example.org