Monday, 11 August 2014

Fun Online Polls: Private landlords & Alcohol health warnings

The responses to last week's Fun Online Poll were as follows:

Which statement is correct: Private landlords in the UK…

… pay more in income tax than they receive in Housing Benefit - 17%
… receive more in Housing Benefit than than they pay in income tax - 83%

So most of you got it right.

There is no official figure for income tax paid on rental income. HMRC's Table 3.4 says that total income tax paid on "Property, interest, dividend and other income" was £10.8 billion in 2011-12, I can't find a more up to date figure. Let's assume half of that is on rental income = £5.4 billion. If you do a fair guesstimate of what they would be paying assuming the usual deductions and exemptions, the tax would be about £6 - £7 billion a year.

So let's call it £6 billion for sake of argument.

The figure for Housing Benefit paid to private sector landlords is more reliable. According to the DWP, in 2012-13 there are about 1.7 million claimants in the private rented sector receiving an average of £105 a week each = £9.1 billion a year.

John says: "The tax regime in this country allows setting buy to let mortgage against tax bill stupid not to."

Yes, there is a pretence that rental income is normal earned income, so you can deduct interest paid from taxable rental income. But then again, rental income is treated as unearned income for National Insurance purposes, i.e. there isn't any. So that's a win-win.

Proper earned income is liable to NIC; and interest is not an allowable deduction against investment income (except in certain very narrow circumstances, which are quite reasonable).
The bansturbators are having another field day:

Health warnings on alcoholic drinks should be introduced to combat problem drinking, a parliamentary group says.

The All-Party Parliamentary Group on Alcohol Misuse said labels should warn about the harmful effects of drinking.

So that's this week's Fun Online Poll.

Vote here or use the widget in the sidebar.