A leading landlord has hit out at a lettings agency’s portrayal of buy to let tax changes.
Rosalind Beck, a campaigning landlord and long-time critic of government changes to landlords’ taxes, has criticised the recent statement by London agency Ludlowthompson regarding £17.7 billion of tax relief claimed by buy to let investors in 2018.
The agency said this was a record, despite recent changes to mortgage interest tax relief and the Wear & Tear allowance, and added that while the clampdown was unwelcome “you’re still able to offset the vast majority of your costs - ensuring landlords will still benefit from tax relief on a high proportion of their rental income.”
Now Beck, in an article entitled ‘Private Landlords and Letting Agents Need To Stick Together’, has taken Ludlowthompson to task.
She says that last year the Landlords Alliance - a new landlord association set up primarily to campaign against “onerous tax and harmful, unnecessary regulations” - stood up for Ludlowthompson when it was attacked by the charity Shelter.
“Shelter accused the agent of ‘discrimination’ against those on benefits. At the time, many landlords felt Shelter's actions were deplorable and the new Landlord Alliance – which, since its inception, has attempted to combat Shelter’s many attacks on private landlords - wrote to Ludlow thompson to offer support. In addition, many landlords spoke up on various forums to defend the lettings agency against Shelter's ill-informed and wrong-headed attack” explains Beck.
She then continues: “Given this support from landlords, it has therefore been galling to see a director of Ludlow Thompson – Stephen Ludlow – referring to private landlords receiving £7 billion in ‘tax relief’ on mortgage interest implying that landlords are doing really well and receiving this ‘gift’ of relief from the government. Unfortunately, this plays right into the hands of Shelter and other anti-landlord organisations and individuals.”
Beck then goes on to say that landlords do not receive ‘tax relief’ on finance interest.
“This is a misnomer which has facilitated the Treasury's attack on landlords and is completely false. As the Institute of Chartered Accountants of England and Wales, the Institute of Fiscal Studies and common sense confirm, it is unjust, absurd and unsustainable to tax a business without allowing it to offset the costs of creating that profit. Finance interest is often the main cost of the business. Removing this does not remove a relief, it contravenes generally accepted accounting practice and effectively imposes a tax on non-existent profit.”
She adds that mutual respect between landlords and agents is essential and warns that “agents would do well to be more circumspect in the future and not misrepresent the government’s heinous tax treatment of private landlords.”
Here’s LAT’s story on the Ludlowthompson figures last week.
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I believe many agents and landlords attack their own group in the hope that they can cosy up with government and get a better deal.
So government create a dog eat dog environment in the PRS.
I also believe the RLA and NLA are guilty of this at times.
It won't work these people a n d organisations are giving the government a helping hand in destroying the sector.
More and more tax hits regs fines continue to come. Far from making it better it creates costs, confusion even by the judges and higher rents.
It also causes the PRS to lose 4000 properties per week. But this is government's hidden agenda destroy the PRS and all the jobs and trades with it.
So landlords and agents need to stick together for survival
Hi there
I think this story has got lost in translation. Stephen Ludlow was actually saying that the Government should not reduce the tax allowances associated with BTL. He was explaining that the ability of landlords to offset their allowances against taxable income is essential if you want to attract more investment into the private housing stock (disclosure, we act for LT)
What is the link to this statement? I can only find similar articles dated December 2015 and February 2018. They are on LT's website and neither has the slightest hint of criticism of the lunatic tax on finance costs. Is Stephen Ludlow aware that the income tax payable can exceed the rental profit, and will be payable even if there is a rental loss before tax?
Stephen Ludlow ought to know the difference between a tax relief and a legitimate business expense.
I called him out on the 12 months ago even explained the difference, obviously a very slow learner.
Perhaps he ought to publicise all the tax relief his business receives from the HMG in the form of salaries, premises costs, gas/electricity/ telecoms, vehicles, etc.
Battles within the sector are just making it easier for the Govt, No Shelter and Critics ( Crisis ) to decimate the PRS. Let them explain to Tenants why they can't find Housing, and the real reason why Rents are increasing - because businesses have to pass on costs imposed on them by Govt ( many at so-called charities lobbying ) to the end users, who are Landlords customers ( tenants )
Section 24 should never have been brought in. 100s of evidence was forwarded in the consultation period.
Only to be totally ignored by the committee, did any of them actually read one? I don't think so.
This is the main reason for the homeless bill going throu the roof and landlords leaving the Benefit sector.
The landlords that councils so desperately need to help house the homeless.
This is a great article which clearly outlines the difficulties being faced by modern, professional landlords when people from their own industry can’t get basic terminology right. Mr Ludlow of all people should have enough knowledge to be able to explain and articulate the issues clearly and without loading the gun for the people who would use that gun on both of us! Paying money out, especially when wholly and exclusively for the business, is a business cost. It costs/loses actual money to the person paying it. It is NOT in any definition a ‘relief’ which is a notional concept rather than one of actual transaction. Labour make this ridiculous assertion when they talk of maintenance fees being ‘generous reliefs’ - they’re nothing of the sort, they are genuine expenses in keeping the property in good order for the tenants. Would we say a florist - or better yet, a lettings agent?! - is getting a ‘generous relief’ for paying for their premises?? No. Its a ludicrous assertion. Stop spreading such nonsense LT and start putting out some proper comment about how and why these changes will affect us all so badly.
Mr Ludlow was offered the support of the Landlords Alliance and spurned the offer. I am at a loss to explain his attitude which in other circumstances would be called shooting yourself in the foot.
This is not the first time Stephen Ludlow has made such crass remarks. I called him out exactly a year ago for making near identical remarks, perhaps he would learn quicker if Landlords started to boycott Ludlow Thompson?
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