Btl Scum Regrouping And On The Offensive. -- Merged

[oatbake]

3 hours ago, jiltedjen said:

most will already of had their first tax bills arrive for the first level of increased leveraged tax. Last time to pay will be January 2019. each year gets worse.

but the small majority of highly leveraged morons hold an outsized portion of the housing stock. Thus many either have heads in the sand or have already started to off-load property. 

for those who know they are bankrupted by the changes, they might as well keep collecting rent right up until they are bankrupted by HRMC, thus a lot of repossessed properties will hit the market next year. 

Most of those who actually complete a tax return... As we know, roughly 50% of landlords do not do this. Maybe the "profits" were so small that they decided not to bother as there was little tax to pay, or just thought that they'd get away with it. Up until recently, the leveraging has meant that this tax has been uneconomical for HMRC to chase. It's going to be "bicycle clip time" for a lot of these guys! Even if they get away with it they'll spend the rest of their days awaiting that brown envelope. 

Of course, all that is changing and HMRC are gearing up to come after them . A great avalanche of Schadenfreude is about to be unleashed... 

[oatbake]

And as a lot of these guys would be, by their own admission, bankrupted by S24, there is every incentive to just sit tight and pray that HMRC do not work out that they hold multiple prroperties from a quick glance at the land register.

[burk]

I hope S24 does prove to be the shaking of the tree. Knowing many in my personal and work circles all professing some sort of business accumen as to why they leveraged right up and bought lots of properties i'm praying they'll get ******ed and ******ed very hard by the HMRC. Although one of the unintended consequences of all this maybe a glut of Range Rover Sports coming onto the market if what i see is anything to go by, that said most of them are probably hired.

 

[Neverwhere]

5 hours ago, Sausage said:

Cheers. I had a feeling it was already in a thread but couldn't remember the name. Trying to do a search on this forum on my phone drives me nuts ?

This is the thread to have a browse through, if you're interested:

 

[Arpeggio]

3 hours ago, burk said:

Although one of the unintended consequences of all this maybe a glut of Range Rover Sports coming onto the market if what i see is anything to go by, that said most of them are probably hired. 

Maybe better at dealing with all the pot holes on the road as a result of all the money going to spivery.

[Neverwhere]

7 hours ago, jiltedjen said:

And of course sentiment for BTL will be harmed a lot. it will be less attractive. AND with more of the better quality renters buying, the remaining renters will be able to fork out less rent.

Not just less attractive, less affordable.

Between 2014-16 the average BTL was purchased at a 70% LTV .

Before Section 24 roughly 97% of the 2 bed PRS housing stock would have been affordable to higher rate taxpayers buying BTLs at or around that LTV.

After Section 24, at 2016 prices, it's less than 35%:

[Mossie]

5 hours ago, oatbake said:

And as a lot of these guys would be, by their own admission, bankrupted by S24, there is every incentive to just sit tight and pray that HMRC do not work out that they hold multiple prroperties from a quick glance at the land register.

Some sneaky sneaks, are sneaky sneaky.

Quote

 

Case Study – Loose lips sink ships!
Friday 29th September, 2017

..................................Back in the office the following morning, enquiries quickly established that the property was owned by our debtor and his wife although the names on the Land Registry details were spelt slightly different, sneaky!!  It was for sale for OIRO £900,000.Our client was updated and he was elated, advising us that he would be drafting papers to serve as soon as possible.

https://www.theabi.org.uk/news/case-study-loose-lips-sink-ships

 

Hopefully HMRC's own systems, and CONNECT are far more powerful, can piece a lot more together, and can pick up on things like this into Section 24 times.

disenfranchised recently posted this on another thread, and I fully agree with it. 

On 15/08/2018 at 00:44, disenfranchised said:

I'm not sure the old left/right thing people keep using to define various politicians has any real meaning. Even other ideological axis like authoritarian/libertarian & socialist/capitalist don't seem to mean a great deal any more. 

We live in a time where the whole political system is rotten and corrupted. It has stopped producing outcomes that align to these ideologies at all, whoever runs it. What's happened to the owner-occupier housing market isn't capitalism, our social housing policies aren't remotely socialist. We have capitalism for the poor and socialism for the well off. 

Yet I would add it goes far beyond politicians.  There are so many rotten, corrupt and selfish individuals in the system - including BTLers.  Having the party of party time, and all-about-them.   Whereas honest and GenRent are expected to always carry it.   And they human-shield against any turn of policy on them, claiming suffering, or someone does on their behalf, seeing them as helpless for their own chosen market choices.

[mrtickle]

I really enjoyed the "Loose lips sink ships" link.

Quote

A fight through skin shredding brambles and a one legged, tip toed balancing exercise ensued to try see into the property.

lol

 

[Freki]

15 hours ago, Mossie said:

Hopefully HMRC's own systems, and CONNECT are far more powerful, can piece a lot more together, and can pick up on things like this into Section 24 times.

Oh yes, it's quite easy to provide yourself with a confidence interval based on how likely 2 different names or other piece of information are spelt

[SOLZHENITSYN]

On 24/08/2018 at 20:39, Neverwhere said:

To add to that as some small consolation this one in particular is most definitely f*cked:

(Source)

IIRC they have their own mad cap scheme that I think may have involved a canal boat  - SOLZHENITSYN might remember the details, but I'm pretty sure it didn't look at all viable.

Their wishing that S24, (which obviously isn't "retrospective" as it only affects currently held BTL debt), only apply to newly borrowed BTL debt is exactly the sort of thing that I'm talking about above: they're essentially wishing that the market floor had been pulled out from underneath them whilst they slept.

Ahh yes, good old Paul Barrett...

S24 is sending him bust due to his level of leverage. He also seems to have bought in areas that are still at pre-2007/8 peaks.

his plan to hold on to his properties is to take advantage of the rent a room allowance (as he sees it working) by declaring all of his properties as his ‘main’ residences (i know) and his tenants as lodgers. He will then live in a canal boat and keep one room empty in each house for him to spend a minimum amount of time in each year.

he ignores the fact that 

1. RARA applies to your only or main residence. Not multiple properties.

2. The RARA tax allowance is linked to an individual, not each property, so even if he could apply it to multiple properties it doesn’t multiply per house.

3. His properties are on BTL mortgages so the banks won’t allow him to live in them anyway.

4. His tenants would lose a lot of rights if they were living in his properties as lodgers and not tenants. So why would they for it?

the guy is an idiot. So much so that I have often thought his is a parody account, but he’s been there a long time. I think he really is just that dumb/desperate.

 

 

[thewig]

That barrat guy really does put the “dumb as rocks” into dumb as rocks DEBTjunkie

[Pytyr]

2 hours ago, thewig said:

That barrat guy really does put the “dumb as rocks” into dumb as rocks DEBTjunkie

Bit rockist, mate.

[mrtickle]

5 hours ago, Pytyr said:

Bit rockist, mate.

Don't take it for granite.

[Neverwhere]

8 hours ago, SOLZHENITSYN said:

Ahh yes, good old Paul Barrett...

S24 is sending him bust due to his level of leverage. He also seems to have bought in areas that are still at pre-2007/8 peaks.

his plan to hold on to his properties is to take advantage of the rent a room allowance (as he sees it working) by declaring all of his properties as his ‘main’ residences (i know) and his tenants as lodgers. He will then live in a canal boat and keep one room empty in each house for him to spend a minimum amount of time in each year.

he ignores the fact that 

1. RARA applies to your only or main residence. Not multiple properties.

2. The RARA tax allowance is linked to an individual, not each property, so even if he could apply it to multiple properties it doesn’t multiply per house.

3. His properties are on BTL mortgages so the banks won’t allow him to live in them anyway.

4. His tenants would lose a lot of rights if they were living in his properties as lodgers and not tenants. So why would they for it?

the guy is an idiot. So much so that I have often thought his is a parody account, but he’s been there a long time. I think he really is just that dumb/desperate.

Thanks Solz 

Desperation certainly seems to bring out a rather bizarre range of behaviour in the most heavily affected landlords.

I guess that by definition large portfolio landlords tend towards magical thinking - having already borrowed completely irrational income multiples on the apparent assumption that tax breaks could never change and tenants would never vote - so it's only to be expected that they respond with wild schemes that are obvious idiocy to the rest of us.

He also doesn't seem to realise that legally the tenants in his properties would only lose rights if he really were living in the property with them, in which case I think they'd have bigger issues

[Neverwhere]

8 hours ago, SOLZHENITSYN said:

S24 is sending him bust due to his level of leverage. He also seems to have bought in areas that are still at pre-2007/8 peaks.

I wonder where those prices will be heading once the majority of BTLers are priced out of the market by Section 24 and the PRA?

On 26/08/2018 at 21:07, Neverwhere said:

Before Section 24 roughly 97% of the 2 bed PRS housing stock would have been affordable to higher rate taxpayers buying BTLs at or around that LTV.

After Section 24, at 2016 prices, it's less than 35%:

 

[SOLZHENITSYN]

On 25/08/2018 at 08:36, oatbake said:

And still plenty of landlords are unaware that it even exists. There is a lag of a few months before landlords actually find themselves presented with a bill (April next year is it?). 

Must be gutting to get the 25% S24 bill and subsequently find out that it's already gone up to 75% and will be going up to full implementation the following year...

 

Not so much gutting as terrifying for many. Imagine the shock of not only finding out that 25% of your mortgage interest was no longer eligible to be offset against your rental income, but that you’ve already cruised through the 50% and are now entering the 75% phase. In just 12 months you’ll be in the 100% implementation phase - leaving you very little time to react to avoid it (I.e. sell now, sell everything).

Going to be a rude awakening for many.

[Ah-so]

I wonder what percentage of landlords will actually receive a tax return from HMRC. If they earn less than the 40% tax band, will they receive the request? 

I know responsibility lies with the landlord, but if so many are ignorant of the law, perhaps they will unintentionally evade tax for years.

[thewig]

Accidental DEBTjunkie

Accidental people farmer 

Accidental rent riser

Accidental family evicter

Accidental tax evader

Accidental bankrupt 

Accidental inmate

Accidental suicide

 

 

..the last one is my favourite 

[spyguy]

33 minutes ago, Ah-so said:

I wonder what percentage of landlords will actually receive a tax return from HMRC. If they earn less than the 40% tax band, will they receive the request? 

I know responsibility lies with the landlord, but if so many are ignorant of the law, perhaps they will unintentionally evade tax for years.

All of them.

Too easy now.

An example:

I was having an argument about the number of furnished holiday lets.

To settle it, i downloaded the entire uk (or england n wales, not sure) rates details - every single rate entry.

Was a few gig csv file. Took me 10m to download.

I then knocked out a simple python script to search the FHL by 5 local postcodes - YO21, YO22. crude inefficient. Took me about 20m.

I had my answers in a dinner time.

Now if i can do that within 1h, whilst eating my sandwiches, with publically available data and a laptop.... just imagine what hmrc can do within 5 years with a team of developers and non public data.

If you want to avoid tax then buying a non ooo house is pretty much the worse way of going about it.

 

[Pop321]

6 minutes ago, spyguy said:

All of them.

Too easy now.

An example:

I was having an argument about the number of furnished holiday lets.

To settle it, i downloaded the entire uk (or england n wales, not sure) rates details - every single rate entry.

Was a few gig csv file. Took me 10m to download.

I then knocked out a simple python script to search the FHL by 5 local postcodes - YO21, YO22. crude inefficient. Took me about 20m.

I had my answers in a dinner time.

Now if i can do that within 1h, whilst eating my sandwiches, with publically available data and a laptop.... just imagine what hmrc can do within 5 years with a team of developers and non public data.

If you want to avoid tax then buying a non ooo house is pretty much the worse way of going about it.

 

There are definitely changes at HMRC coming with monthly reporting and online progress being made. So all LLs will feel that and some will get found out  

Less sure about the ability to use intelligence the way you describe....common sense not so common for government departments. But your point is well made.....it’s relatively easy if/when they DO decide to get serious. 

In terms of LL tax return visibility on profit I am not sure we are there yet. The returns ask for LLs to enter the interest (75% of it but that not hugely obvious) and then the remaining 25% somewhere else. So it’s a little messy, less visible if being done via an accountant (would ‘hope’ a 10+ property guru has one?) and I don’t think LLs will see ‘tax bills’ rather a squeeze in profit and many won’t understand why.

I think S24 draws them in slowly. That 75% deduction will reduce each year, the gross income increase each year and the effect become increasingly obvious. 

The IV is in the arm and the first few mm of blood is being drawn. Unless they pull the tubes from their arm they will drift into a coma over the next couple of years and the baliffs will arrive. 

Remember though, this is not an argument we can win on HPC. It will always be the tenants fault, governments fault, brexits fault, banks fault, younger generations fault....this was a magic machine, magic money  

Only solice is that whilst they will absolutely be right and we will be absolutely wrong? - just knowing they could have completely avoided it, they had 4 years to react and that some will lose it all should help. ?

[stop_the_craziness]

On ‎28‎/‎08‎/‎2018 at 07:30, spyguy said:

All of them.

Too easy now.

An example:

I was having an argument about the number of furnished holiday lets.

To settle it, i downloaded the entire uk (or england n wales, not sure) rates details - every single rate entry.

Was a few gig csv file. Took me 10m to download.

I then knocked out a simple python script to search the FHL by 5 local postcodes - YO21, YO22. crude inefficient. Took me about 20m.

I had my answers in a dinner time.

Now if i can do that within 1h, whilst eating my sandwiches, with publically available data and a laptop.... just imagine what hmrc can do within 5 years with a team of developers and non public data.

If you want to avoid tax then buying a non ooo house is pretty much the worse way of going about it.

 

One big difference though......you give a **** about getting the answers and most government IT employees don't

[Confusion of VIs]

3 hours ago, stop_the_craziness said:

LOne big difference though......you give a **** about getting the answers and most government IT employees don't

Pretty Inaccurate and unnecessary comment.

HMRC already have far more information than they can process. The actionable cases are prioritised by software that estimates the likely ROI on a case by case basis. Beyond progressing enough cases to show that Landlords are at risk of being investigated. investigating small scale BTLers wil not generate enough of a return to be a priority.  

That said,  goby portfolio landlords who bring themselves to attention by telling the world they have found an exploitable tax loophole and setting themselves up as tax advisors are 100% certain to be investigated.    

Edited August 29, 2018 by Confusion of VIs

[Neverwhere]

56 minutes ago, Confusion of VIs said:

HMRC already have far more information than they can process. The actionable cases are prioritised by software that estimates the likely ROI on a case by case basis. Beyond progressing enough cases to show that Landlords are at risk of being investigated. investigating small scale BTLers wil not generate enough of a return to be a priority.

Plus they're steadily hoovering up tax evading BTLers via the Let Property Campaign, as per Bland's FOI on Liar Lets:

On 07/04/2018 at 15:18, Bland Unsight said:

A little while back we were discussing (again) the extent to which HMRC were chasing landlords for unpaid income tax. I haven't seen much detailed reporting of this. There are two things that crop up whenever we discuss this on the forum. Firstly there is the long-running HMRC Let Property campaign. Secondly there is HMRC's 'Connect' project (link).

The Let property campaign began in September 2013 and was described by the Telegraph at that point as an "18 month amnesty" (link). The Telegraph piece gives the following quote from Danny Alexander, then the First Secretary to the Treasury

Quote

He called on landlords to “pay up or face the consequences”.

“Over the last decade rents have risen twice as fast as wages, stretching family budgets. But some landlords still failed to pay the right tax due on the rents they receive. I’m talking about landlords who own more than one property, who rent to students, people with holiday lets and those who let houses in multiple occupations,” said Mr Alexander.

“And it adds up to a staggering £500m owing to the taxman. And we want it back. So we’re launching a campaign with a simple message for the rogue minority of landlords. Pay up or face the consequences.”

The Let Property campaign (and the amnesty) is still running a full three years after the original 18 month period ended. I put in an FOI for some details about how many people had come forward, the tax that had been paid and the fines levied (the amnesty means that they fine you on the most favourable basis - i.e. that it had been essentially negligence or ignorance and not an active and knowing attempt to avoid paying the tax owed).

Here's what I got back.

Tax year	Individuals	Tax paid	Fines paid
2013-2014	885	-	-
2014-2015	9,480	£   19,620,981	£   2,459,863
2015-2016	10,037	£   28,450,980	£   3,721,657
2016-2017	8,077	£   24,091,431	£   2,633,930
Total		£   72,163,392	£   8,815,450

Obviously this doesn't reveal anything about what is going on with Connect, however it might suggest that the ability of HMRC to follow up on the leads that Connect is generating is being compromised by the sheer volume of work being generated by people coming forwards under the Let Property amnesty.

One of the arguments that I've read on here is the idea that Connect is just TV detector vans re-imagined for the age of big data; an attempt to scare people into paying by pretending that you have the means to find them even though you have no such technology. I don't buy that.

Maybe there are some landlords out there who are taking the fact that HMRC haven't felt their collar yet as evidence that HMRC has no way to catch them. But maybe what's delaying matters is the sheer volume of people coming forward under the Let Property campaign?

Whilst the number of people coming forwards under the Let Property campaign amnesty may represent only a tiny fraction of the people dodging tax, it's still a lot of work to get through. The possibility exists that almost five years after the initiative was announced and with 25,000 tax cheats already dealt with the whole thing may just be getting started as HMRC prepare to move from dealing with people who have made use of the amnesty to the next phase; using Connect to deal with the committed tax evaders. Time will tell. Meanwhile, the Let Property amnesty is still running at time of writing (link).

 

[Neverwhere]

1 hour ago, Confusion of VIs said:

That said,  goby portfolio landlords who bring themselves to attention by telling the world they have found an exploitable tax loophole and setting themselves up as tax advisors are 100% certain to be investigated.    

[mrtickle]

9 minutes ago, Neverwhere said:

Yes I liked that too. Remember when he visited the government to teach them about the "unintended consequences" of their terrible policy, and he was boasting about how they were hanging on his every word and taking furious notes?