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First let me say I don't mind paying fair taxes and if you are paying tax its a measure of success
The more you pay the more money you have made (Simple)
But that was the days of the past 2017 going forward is a different thing
My own rate of tax from BTL in my own name would be around 82% on the same profits I am making in 2016 due to S24
This rate of taxation for running a serious legal business is outrageous in my opinion when you think that the highest rate of tax in the UK is 45%
So when is enough enough ?
Even when I have finished my Landlord shuffle within 4 years my Tax Bill in money terms will still be double the amount I am paying now on my personal assets
My Company Taxes will still be high
my own figs show I will pay around 55% ish to take any cash from my Company which is still 15% higher than I pay Now ??
The truth of the matter it dosent matter what I do my Tax rate in real terms is always higher than it was
So much for low tax rate UK
Setting aside any possible Capital Growth in my property at what rate of Income tax would put me off investing in uk property
My own feelings are that it has reached the point where growing a business in Res Property is just not worth it
Maybe I am victim of my own success maybe I have done too well
and our govt know this ???
I ask you what rate of Income Tax National Ins Corporation Tax and Dividend Tax would you be happy to pay before its to high
I read every day about why the principles of property hold true lack of supply ?Growing population
But to do business you need reward and taxation needs to be fair
If its not Business Men and Women will not invest
Is this really what the Govt wants
Do they not want small business
We are not alone every business is paying more But we will be paying more than the rest
The small garage owner compared to a large chain taxed in a very different way
The only difference from the two above is we have a capital asset to sell
CGT in my opinion is the only fair tax we have but even the govt has treated us in a different way we pay quicker and at a higher
What is your opinion Am I wrong to think we are being singled out for special tax treatment
and the question I ask Govt what do you want from us ? and what are your future plans for the sector
Learn Change and Adapt ?????
As you have mentioned there needs to be enough carrot to incentivise the work.
If after all your efforts you earn the same as someone on welfare at £26000 what is the point!?
Perhaps watching J Kyle beats working!?
Penal Tax rates incentivise many to leave the UK for more benign tax regimes like.................Gibraltar!!!
Most of us work 6 months of the year for the Govt.
Thereafter anything surplus is ours to keep.
LL are are being forced to work more than 6 months for the Govt!!
Is that fair?
Do you really want to spend 8 months working for the govt with only 4 months of income to be totally yours!!?
It simply isn't viable for Govt to expect LL to live on 4 months of tax free income when the rest of the population 'enjoys' 6 month's worth!
The tax you pay etc should be eguivalent to 6 months of gross income.
Anymore than that and you are being overtaxed.
I do like the 8 month tax thing and your right
I get it in the neck for being down on BTL I am not down on BTL I am down about Taxation of the PRS
And I just wont work or invest for 6mths of profit and that's where it is now
Its just not worth the effort or the risk in my opinion
but maybe that's what the Govt wants but cant say so in straight words
That's exactly it Paul,
Its because there's so many people lounging in bed watching Jeremy Kyle in the morning ( plus his never ending supply of benefit trolls ) that incurr so much expense for the government that they have to find more money to fund it. and
As 'Landlords' are a dirty word, almost as distrusted as Politicians but without their level of pay increases, we were and are an easy target.
Yep in a nutshell none of us objects to fair taxation.
LL are just not being taxed fairly for mainly political reasons which is just simply unfair!
Just had a thought if you use the monthly thing add VAT Petrol Duty and other sly taxes and I bet we are all working for near 10 months for the govt lol
Yep the old stealth tax game.
Govt is very, very deceitful.
As taxpayers we don't really have time to think too much about these things.
If we did we'd realise how much taxpayers are being stitched up by Govt.
It is no wonder that people are using credit to sustain living standards as taxes of all sorts, direct and indirect eat away at net income.
Short of going off grid I don't see how any of us can escape the insidious Govt tax clutches.
Just part of modern living I suppose!
As a homeowner and basic rate tax payer I'm used to paying tax on anything I earn from employment above my personal allowance. As an accidental/novice landlord I'm repeatedly surprised at how much more I can earn from property before I have to pay any income tax, I can potentially double the personal allowance. I understand how the taxation system is harsh on high earning landlords but for low earners like myself it seems very generous.
As a matter of interest have you worked out at what point you would consider you were being harshly taxed.
There is a tipping point I think.
Somewhere around £40000 Gross income which includes S24 mortgage interest!
I don't think I will be harshly taxed, but my aspirations are for a £20k net income and a maximum of 20% borrowing. I do think the example given above is too harsh and there must be a tipping point somewhere.
there is a ceiling on BTL now
If you can stay below the Higher Rate tax your ok
Go above it and its and issue
The Prob with S24 is if rates rise the potential for lower rate tax payers to be placed in bracket which S24 hits
Its a moving target and don't forget S24 covers all financial costs
The game now for all Landlords is to try and stay a lower rate tax payer
one way or another