I have learned a lot from the General Election, like don’t place bets.
My daughter Georgina was utterly stunned to learn that the Cabinet excludes the housing minister yet sport and media both feature under the ‘culture’ umbrella.
She described it as ‘bare peak’ which for those of you whose first language is English means ‘very bad’.
My son said: “Dad, someone needs to do something.”
The fact is, I have very clever kids who have no hope of buying a home without help from the ‘Bank of Dad’.
Then we have tenants who are treated badly by a small minority of agents.
We have Shelter and Generation Rent at odds with the industry when we should be working together as SAFEagent showed was possible.
We have the Government launching an assault on the landlords who provide the private rented sector with much-needed homes and we have an industry providing an immense service to tenants and yet agents’ very existence is threatened by the proposed ban on charging for doing so.
It seems incredible to me that whilst housing is acknowledged by all factions as being at crisis point, the post of housing minister has been side-lined and that there is no cohesive voice providing proper high-level representation.
Media and sport, transport, women’s rights and equality are important, as are the myriad of business roles, but how can housing be considered a lesser issue when it is universally acknowledged as being one of the biggest issues for all?
We all need somewhere decent to live.
My hope is that everyone involved in our industry, its supporters, its detractors, tenants, landlords, industry suppliers, regulators and observers, agree that housing is too important to be an after-thought.
Housing for all deserves the same status as other key issues and representation at Cabinet level is fundamental if Government promises are to be taken seriously.
The sheer number of housing ministers there has been illustrates that it is a role for transient opportunists or a position offered to placate the ambitious.
Becoming housing minister should be an ambition, not stasis. Remember also, a cabinet minister earns a lot more than a standard minister – so there is a value that the Government places upon the role, which is telling.
I believe we all have an opportunity to demand that housing is made a priority as it’s a basic human right. For once, friends and foe can join forces at a time of political uncertainty to shape the way Government treats stakeholders and work together to ensure a fairer system.
We can debate the policies, we can argue the detail, but whichever side you support, you can’t debate the importance of housing.
Let’s be honest – more people are affected by housing than they are by sport, media or transport. On this point my daughter is right, just don’t tell her. It’s hard enough as it is.
So let’s get together and all campaign to have proper representation for housing to be at the Cabinet level where it belongs.
I sincerely believe that all sides of the debate could achieve this if we work together.
Housing is too important to be defeated by factions divided in pursuit of separate agendas. Get housing back in at the top table and support the very people who need homes.
Well said Eric
I have a strong belief Housing should be an apolitical department that runs consistently irrespective of party politics. The disruption of 5 year ( sorry.. 5 year until it suits us) elections means long term strategy and implementation isn’t possible and that simple doesn’t work for a stable and equitable society.
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So what? A ten year housing dictator?
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Unfortunately this government, doesn’t care about housing, they view it as a trivial matter, something where they can spew out some numbers about building X amount of houses per year and that will keep the voters happy. Until we have someone in charge, either as PM or as housing minister who actually understands our sector, or at least sees the benefit of a housing and rental sector that works for the many, then this situation will never change.
I have said since i was a young estate agent, the housing market is the engine room of the economy and a well oiled engine works well, an engine that isn’t looked after, ends up causing problems.
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We seem to have a perfect storm going on in the housing market at the moment.
Rules and regulations brought in through the Mortgage Market Review which limited supply, combined with measures that increased demand, have pushed prices up and substantially decreased levels of available stock.
Huge numbers of people are being driven into renting…probably permanently. Recent reports say that within a few years up to a quarter of all households will be in rented accommodation. Who will pay all these rents when these people retire, unable to afford their own housing?
And no one in government seems to be taking the slightest bit of notice.
I agree with Robert. We need a permanent cross-party strategical solution.
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The solution is obvious… http://saynotogeorge.co.uk/how-to-solve-the-housing-crisis/
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We could start with the basics. I estimate £40 billion tax on BTL income hasn’t been collected, has been avoided or evaded.
A micro amendment to legislation means by about lunchtime on April 6th I could have a fairly accurate assement of who is due to pay tax and roughly how much. The trouble is neither the civil service nor the public sector unions would stand for such an efficient system of tax assessment.
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If it truley was £40B don’t you think HMRC might have had something to say…?
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That is a figure aproximated in a meet with two senior executives from HMRC
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So you claim you can get the country £40B, have even spoken to HMRC about it.I take it they could see the big hole in your plan as they havent taken it up yet?
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I haven’t claimed that. I ran through with two senior members of HMRC their estimations of tax not collected on rental income, they (not me) estimated £2 billion per annum. HMRC can recover undeclared and un-paid tax back 20 years the whole of the BTL era £2 Billion x 20 is £40 billion.
They admit they do not know how many landlords there are. They don’t know what the actual tax outstanding is but they did confirm SA105 L&P is not an obligatory declaration. If you are PAYE and haven’t been asked to complete SA105 L&P and don’t return one you are not breaking the law but are still liable for the tax and penalties if they ever catch up with you within 20 years.
At the end of the consultation I received a letter on Whitehal vellum confirming the proposal to improve administration of L&P tax was of no interest.
A copy of the letter has previously been posted as eveidence I am not making this up which seems to be the tone of your disbelief.
(I’ve retweeted a copy of the letter)
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I think you really don’t have a clue as to what tax is unpaid, though I’m interested to know why you have made it such a personal mission to keep banging on about it.
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Because it makes greedy people nervous.
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Mr May
In response I’ll start by saying that I am a private landlord that declares every penny I make, including right down to 24p interest on a little-used bank account. Many would therefore think that I would support the measure you suggest against the minority of landlords that do not declare their rental incomes. I don’t.
You have deliberately hijacked an excellent piece by Eric Walker to push your own agenda in terms of what you claim to be ‘unpaid, avoided or evaded’ BTL tax but go on further to contradict yourself in saying that your figure of £40bn includes penalties (and potentially extremely harsh ones at that).
Don’t misunderstand me, I completely accept that some landlords are ‘guilty as charged’. My accountant has uncovered 6 properties within his client base where income was not declared, and I have a friend, an accidental landlord, that was in the same position. Now however all 7 of those incomes are transparent to HMRC, so I would suggest that the issue is reducing. I’d be happy to be proved wrong, but as you say, HMRC do not know how many landlords are out there. Indeed with such little knowledge it is at best, an attempt at fiction, to come up with figures of what can be clawed into Government coffers.
As for your use of the word ‘greedy’ I think your finger is pointing in the wrong direction. HMRC already have the powers to go into anyone’s bank account (including yours) and take whatever they feel they are owed. They do not need to prove it, they do not need a court of law or even tell you in advance. They can just do it. It is then up to the individual to prove they have been wronged and this can be an expensive legal process, something difficult to initiate when your bank account has just been cleared out. What has happened to the law in this country that says ‘innocent till proven guilty’? We appear to be heading back to feudal times when the Lords and Barons can crush the peasants as they please.
Whilst on the subject of HMRC, a friend was at a high level accounting seminar where HMRC was represented. Someone in the audience made a statement to the representative in regard to S24 and said ‘You do realise that it will bankrupt some landlords don’t you?’. The glib response was ‘Yes we do’. So I’d suggest that the adjective of ‘greedy’ should be placed with your friends at HMRC.
However my dismay with a further attack on the PRS stem from my complete agreement with Eric’s frustration and our appalling housing crisis. Despite reports saying rents are dropping the reality is very different. Rents and homelessness are rising across the country and even my own local rag came out yesterday with the headline proclaiming that the Council is footing the bill for it. A witch hunt that will drive more landlords out of the market will only exacerbate the issue. Solve the supply of housing before you do more to damage the existing providers in the sector.
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I see your tweet about a letter from your mp (no mention of meeting with senior hmrc officials), I hope the young animal was worth it (if it truley was vellum), which i guess it was not worth it.
The ‘tone of my disbelief’ comes from you having a meeting with senior HMRC staff, who then decide that £40B (capital b) is not worth bothering over!!!??
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This is very funny. So, let me get this straight. You know two senior execs at HMRC who have confided in you that they ‘know’ (guess) landlords owe £40bn?!?! And that these clever people – as clever as you, apparently – have worked this out by assuming landlords were evading £2bn a year from the year they got started??? And it’s always averaged this amount? It is quite an astounding assumption. I notice you’re not concerned about landlords losing £9bn/yr (proven fact, not guesswork to suit an agenda)? Nor are you bothered that landlords provided 83% of ALL new dwellings between 1998 and 2013? If your argument is ‘landlords are bad because I guessed they might be’ then you are seriously out of touch with the industry.
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I’d suggest it’s even funnier than you have said Deltic.
If there’s2 bn pa of unpaid tax let’s look at it in a little more detail…
2bn = 2,000,000,000. Now if we assume that the unpaid tax was at the 45% rate we can get a little perspective, though of course there will probably be a significant amount that would only be collected at the lower rate.
2,000,000,000 / 45 x 100% = a rental turnober of 4.44 bn (the 4 being recurring). The average UK rent on a new tenancy in May was £901 according to the Guardian.
So dividing the 4.44bn turnover by 901 we get 4,932,790 properties which are let out and invisible to HMRC !!
I think not! That’s a bigger number than the whole of the PRS can claim in size overall. However if you then throw in the fact that many landlords would only be paying the lower rate, rents would be much lower on long term tenancies AND the tax would be due on profit and not rental income, the £2bn tax could equate to supposedly undeclared income on 7, 8 or 9 million houses!!! 🙂
The £2bn figure that Mr May comes out with is quite absurd!!
I think either:
(a) HMRC are having a laugh with him or…
(b) he’s been to the Dianne Abbot School of Advanced Mathematics!
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‘JMK’
You say to Robert May
“You have deliberately hijacked an excellent piece by Eric Walker to push your own agenda…”
Actually, I think you tried that yourself – at 08:28am – by posting
“The solution is obvious… http://saynotogeorge.co.uk/how-to-solve-the-housing-crisis/“
but as can apparently be seen by the lack of response, you seem to be the only person of that opinion.
So the tack is changed, and you have a pop at the credibility of his figures with this pearl –
“So dividing the 4.44bn turnover by 901 we get 4,932,790 properties which are let out and invisible to HMRC !!”
Erm… not if you then go on to divide that BIIIG number by 12 – the ‘twelve’ being the number of months in the year that you have failed to multiply the £901 by in order to work out your estimate of the number of properties.
I would suggest the appropriate word for such a blatent schoolboy error be ‘OOPS’.
Seems that maths ain’t your strong point which, I have to tell you makes going toe to toe with Robert May on matters of a numerical nature just a little akin to arming him with a 155mm M777 howitzer and then climbing back in the barrel with the other fish.
You need to brush up on the basics… preparation is far more important than presentation as you so clearly demonstrate.
Instead of opening a doorway for what could have been an extremely interesting exchange of reasoned opinion, you’ve instead barged into the door face first – and seasoned timber does not give way when the battering ram is nothing more tha a nasal septum.
Shame, really. It’s been a while since Robert had a worthy opponent.
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Do please tell what this micro amendment is? And why, if it so simple, HMRC wouldn’t ask HMT to get it implemented?
If HMRC/HMT are wilfully not collecting tax then should you not report this?
BTW: Legally “avoided” tax is not a sum that HMRC can actually/legally entitled collect and put in the Treasury’s coffer. So how much of the estimated £2bn falls into this category?
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Really a response to Peebee. Yup can’t fault you on that. Well done. However whilst the numbers may be out the message is clear, You’re looking at something like half a million properties that apparently haven’t been declared. Complete rubbish as I’m sure you’ll agree. Robert May is intentionally misleading people and has hijacked a good article by Eric for his own aims. And I’m guessing yours too.
Whilst I made a big error with my maths it is nowhere near that which has been made by Robert May. As for a ‘worthy opponent’…. I don’t consider he is in the right league. And no, he is most definitely not Premier status. He is 4th division at best. However, YOU might just make it to a higher level. A tip though is to understand that most people on this forum want a solution to the housing crisis and are not here to distribute the misleading stuff that Robert wants to diseminate.
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“Yup can’t fault you on that. Well done.”
I neither want nor deserve praise – however insincerely it is given. You were embarrassingly wrong – I’m just the bloke that said he could see your winkie when you’d paraded yourself as some kind of Emperor in all his imagined finery.
“…hijacked a good article by Eric for his own aims. And I’m guessing yours too.”
Nowt to do with me, Sunshine – in a business sense, at least – I don’t do lettings.
But I DO pay 100% of the taxes due on my earnings – and firmly believe that everyone else should do the same where they are due.
And I respect anyone who can force or otherwise bring about a change that facilitates that.
So… if you want to call that an agenda, feel free – but I think you’ve already proved that your thoughts are somewhat befuddled.
Best to drop it. You’ve already managed to blight the comment stream of what we all seem to agree is an excellent piece by a hugely knowledgable – and most importantly a hugely respected – figure in our beleagured industry and turned it into a free-for-all.
For that, I certainly don’t give you a “well done”.
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“You’ve already managed to blight the comment stream of what we all seem to agree is an excellent piece by a hugely knowledgable – and most importantly a hugely respected – figure in our beleagured industry and turned it into a free-for-all.”
Which, for my part in its blight, I apologise wholeheartedly to the author.
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Apologies for the delayed reply I left home before dawn and I am just back.
The change; include Rightmove , Zoopla Gumtree etc into section 23 of the 2011 Finance act, to identify all those advertising properties for rent, from there request CSV Section 23 returns in accordance with the act and from there request SA105 L&P. of the landlords
Cross referenced to Land registry it is possible to investigate how long properties have been in the same ownership and thus how long a property might have been a BTL
For my doubters a bloke called Jim Harra ( a General Director or something like that) instructed (13-7-2012) two ‘property taxes and risk and intelligence specialists’ to visit me, they duly did (Sept 21012) and parred my estimate of £3-5 b back to £2 b and when I said that was still £12 b they told me “oh no, we can go back 20 years on taxes not just 6.
Reference the maths 4.1 million tenancies paying £901pcm for 12 months? 44,329,200,000
“£40B (capital b)” are you sure?
I love that I am in the dock and being ridiculed for suggesting HMRC assess and collect all of the tax due on the profits of the PRS and that they put some effort into collecting all of it.
For what it is worth I’ve now written the extension to Section 23 report and can identify all of the agents who ought to be completing Section 23 returns.
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I dont know why HMRC think btl landlords own this money. Most BTL is via a mortgage so there is a paper trace all the way.
I dont think BTL are that stupid up until this year all interest on the loan was 100% deductable so why would they not declare.
If people are not declaring then I would think its ones without a mortgage and ones letting originally their own house.
But I suspect the biggest legal loss of revenue is foriegn buyers and Build to Right with off shore accounts.
Actually HMRC can see the amount Landlords have to pay out and the low margins for most they get in return for the effort.
Yields 4% average for all the hassle, they are subject to damage and rent arrears and very limited means of recouping.
Now if government wanted to change this so landlords could easily recoup their losses then HMRC would have more taxes.
I dont believe they are losing all this money at all, but when landlords start going bankrupt due to section24 they might lose billions then and not just from the landlords , the economy will suffer.
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Well said Mr Walker. Never has a truer word been written and I for one will be using the bones from Eric’s piece to write to my MP demanding the government stop paying lip service and recognise the real importance of housing.. May I suggest that Eye co-ordinate and promote a campaign whereby every MP in the country receives such a letter. This matter is to important to ignore whichever side of the fence you view from.
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Just for clarity, I wrote this before the new Housing Minster was appointed out of frustration. The tragic fire we have all witnessed on television has is beyond horrific and underlines why housing is so fundamentally important. There can be no compromise where peoples lives are concerned.
I urge people to look at the list of cabinet posts and ask why the Housing Minister doesn’t merit inclusion. At the very least, it would show that Government takes the issue seriously.
https://www.gov.uk/government/ministers
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Well said Eric. This is a cause that needs pushing and support from the industry, politicians and media.
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hundo percent peng article eric. posts are lit af, 100% bants.
(Absolutely great article Eric with the commenters here making some very good points.)
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If my personal aim of seeing everyone is paying the tax due on the rental income they are receiving is offence to some I make no apologies for that.
If Jim Harra’s staff estimations are correct, 400,000 families do not have a home because of it. There are senior people within government who are aware of the solution and are doing nothing about it. Criticise me all you like, I am using my knowledge, my experience and my reputation to stand alone against a broken system. How about you let me get on with it or prove to me every penny of tax due is being equitably collected.
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