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.”