The Chancellor announced in the 2015 Summer Budget that from 2020 Mortgage Interest Relief for residential landlords would be restricted to the basic rate of income tax (20%). This will be phased in from 2017. You can read more about these changes on our RLA taxation campaign page here
Basic rate taxpayers believe they will be unaffected by the changes, but because tax will now effectively be applied to turnover, not profit, many will find themselves paying 40% tax in 2020.
As part of our ongoing campaigning on this issue we are trying to demonstrate to Government that they have very much underestimated the number of Landlords that will be affected by these changes. The Government have said the changes will only affect one in five landlords. However, we believe the number of Landlords affected will be much higher.