A Labour shadow minister had urged the Government to take action to make sure landlords who have incorporated can’t recoup the cost of tax changes next year.
Shadow Communities and Local Government Minister Lord Beecham (Labour) has tabled two written parliamentary questions asking:
- Will the Government take steps to ensure that limited companies are not better placed than other landlords in relation to the taxation of profits engendered by letting residential properties?
- Will the Government introduce plans to prevent landlords of residential properties from recouping the cost of changes to the taxation of rents of such properties which will come into force next year; and if so, how?
Landlords are already facing an anxious wait following Philip Hammond’s announcement that the Government is planning a review into the way incorporated businesses are taxed in the Autumn Statement.
In his November 23rd speech he said: “Technological progress is changing the way people live, and the way they work: The tax system needs to keep pace.
“For example, the OBR has today highlighted the growing cost to the Exchequer of incorporation.
“So the Government will consider how we can ensure that the taxation of different ways of working is fair between different individuals, and sustains the tax-base as the economy undergoes rapid change. We will consult in due course on any proposed changes.”
Tens of thousands of landlords made the decision to incorporate following last years’ Mortgage Interest Relief announcement in a bid to reduce tax liability.
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