Speculation that the Truss government might move on to tax cuts to incentivise landlords appears wide of the mark.
There has been comments from some housing market observers last week that the absence of any stamp duty or tax benefits to landlords in Chancellor Kwasi Kwarteng’s mini-Budget might have been rectified in further tax changes later this year.
However, there seems little hope of further tax cuts in the near future following not just the slide in the value of the pound on global markets, but also especially severe criticism of Kwarteng’s measures by the International Monetary Fund.
It has openly criticised the UK government over its tax cut plans and it warns they're likely to fuel inflation.
This is considered to be an unusually outspoken statement for the IMF, which usually works with free market governments to stabilise the global economy.
The IMF is warning that the proposals by the government are likely to increase inequality and speed up the rate of price rises. The IMF says the government has a chance to "re-evaluate" tax measures - especially those benefitting high earners - when it publishes its more complete fiscal plan in November.
The full IMF statement says:
"We are closely monitoring recent economic developments in the UK and are engaged with the authorities.
"We understand that the sizeable fiscal package announced aims at helping families and businesses deal with the energy shock and at boosting growth via tax cuts and supply measures.
"However, given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy.
"Furthermore, the nature of the UK measures will likely increase inequality.
“The November 23 budget will present an early opportunity for the UK government to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high income earners."
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Tax cuts 😂😂 that is the reason the pensions of millions nearly collapsed yesterday 😬😬. Not a chance. This government will be lucky to stay in power.
the IMF ? another arm of the powers that be
You Shall own Nothing and eat ze bugs !!!
The biggest inequality is between homeowners and tenants and their entitlement to UC.
Tenants get LHA rent plus potentially discretionary housing payments in addition.
Homeowners get no help towards their housing costs whatsoever.
In terms of earnings a single parent tenant with 2 children can earn around £55000 and still have a UC entitlement while a homeowner loses UC entitlement at about £32500. A second adult in a household adds about £44 a week to the household UC entitlement.
At earnings of £600 a week a tenant family will receive about £160 a week more UC than an owner occupier family. That's more than £8000 a year extra for a tenant.
No wonder both the Conservatives and Labour are so keen on promoting home ownership.
Perhaps the media should stop banging on about poor downtrodden tenants and start campaigning for fairer treatment for homeowners and middle income families.
The whole benefits system needs a major overhaul, but no government dares to
Very true and the reason being Its gone so big and out of control, it would be harder to find someone that’s not
on it but Its not popular to say this.
Duncan Smith, supposedly simplified the benefits system ,!
What a load of rubbish the response to the mini budget has been. The tax cuts are minimal compared with the inflation dividend and fiscal drag on pay rises. Get a 3.5% rise and you’re paying more tax than before. Yes, even the high earners.
You wonder why they don’t say this - I guess they don’t want to draw attention to it but you’d think the experts who are bleating would know this. Guess their comments are politically motivated.
Why have they reduced corporation tax and high earners tax and removed the cap on bankers bonuses? Because the banks have told them they’re off to Frankfurt if they don’t due to Brexit. For even more obvious reasons they don’t want to admit this, either.
If this blows over, which requires Kwasi to come up with a reassuring statement alluding to the above without admitting it, then I think section 24 might be on its way.
Paul, Deutsche Bank has a largish new building near to centenary square in Birmingham which apparently has a trading floor. Nice looking building in a nice spot. Any bankers is going to have a fit when the government is borrowing money to pay peoples fuel bills, and housing illegal immigrants in 4 * accomodation. There are also a staggering number of people who don't work. 2008 bank bailout has been recently reputed to have cost 1.1 trillion ! The big problem is America, which can't possibly pay of its debts. And of course the Euro, very very funny money !
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