Salary sacrifice mortgages petition is going to Parliament

[KievLoverTwo]

What do you think?

The OH cynically said 'it will just be another way for employers to tie you to the company.'

I doubt the government have the money to allow the tax and NI relief it would allow that folks already pay on our mortgages, tbh.

https://www.dailyrecord.co.uk/lifestyle/money/calls-pay-mortgage-salary-sacrifice-30041394

https://petition.parliament.uk/petitions/633889

But that's discriminatory towards those on the lowest incomes! I don't pay much tax so it would be a case of me paying essentially more than someone on twice my salary

I hope this does not go through. It’s a scheme to put more money in the pockets of people who are paying a mortgage, diverting it away from tax and NI which is supposed to fund our social services, like healthcare. It also does nothing to help those who can’t afford to save a deposit for a mortgage and would drive further the gap between the better off and those on lower incomes

No chance

It would drive up house prices, put money in the pockets of house builders, nudge people towards buying large properties, and deprive the government of revenue for public services. It would also be a PITA for payroll and HR which have enough problems paying people correctly.

Although the proposer, a bank manager, mentions it would allow people to become mortgage free earlier in life, instead I think people will put even more money into housing and it would divert money from savings and pension contributions.

The proposer mentions it could be capped, with individual taxation and increasing unmarried couples, it may be hard to achieve.

Seems like a bad idea to me. It the terms of the petition, it will simply drive prices higher, with no net effect of affordability and mean people pay off their mortgage later.

That doesn’t benefit the poorest and just creates a bigger gap. For example, by doing that we’d be able to claim child benefit as it would take us under the threshold just because we have a big mortgage.

I would far rather see banks using 3 years of on time rental payments as evidence of affordability with small deposits needed.

It's a no from me. This would be massively regressive: just a way for the already relatively wealthy to hoard wealth in the form of property at the taxpayer's expense.

I would personally gain a great deal, but as a society we would all lose.

Even if the Tories could be persuaded this was a good idea (and I don't think they're that daft, to be honest) can you imagine the next government continuing the policy? Or banks getting involved, given the predictions about the likely outcomes of the coming election?

I hadn't considered the wider implications. You all make very good points. It would only benefit a small sector of people, whilst taking money from the NHS.

There's so many variables and unfairness. I know that is the case in a lot of areas but for example. Employee A gets tax free mortgage of a low rate of 3.9 percent( by today's standards )but person B has bad credit so gets more at 7 percent as due to decisions took out a sub prime mortgage.
Person C has a bigger mortgage as their parents gifted them 40 percent but Person D has a small as they had to save up their own deposit.
Lots more too.

We'd benefit from this very significantly, but it's still is a terrible idea (for all the reasons outlined by PP). Completely counterproductive in terms of helping those who need it most, and would create a massive hole in an already stretched budget.

It sounds reminiscent of Miras - mortgage tax relief at source - which involved lenders effectively deducting the tax on the interest element of a mortgage. Previously, this was given via a change to the tax code. Only problem in the late 70s/early 80s was the frequency of the changes and their effect on the paye system. Rates went from 10% to 15% or 16.50% between 1978 and 1980/1.

Giving tax/NI relief on the capital repayment is quite frankly ridiculous! And who pays for it?

Obviously this will never go through. But leaving that aside, the tax rules for salary sacrifice don't quite work like that.

An employer paying a bill of an employee will be taxed and NI'd as though it were a payment of money to the employee - as they are basically the same thing.

Salary Sacrifice tends to work where the benefit that is received for the sacrificed salary has a different tax and/or NIC treatment. eg pension contributions (tax and NIC free), a car (BIK calculated differently than cash) or even Tesco vouchers as employer/the SS scheme they are with might be able to buy them in bulk for (say) £8 and this is what would get taxed - the cost to the employer.

So, not only will this not get passed for all the obvious reasons, but it isn't even how the tax aspect of SS works - so they'd need to be trying to change those rules as well.

Front page of the papers today, tax cuts coming in the autumn. I bet this is part of it. They want/need people back in PAYE work far too many people living their best lives at the moment

@3BSHKATS there won’t be any meaningful tax cuts, especially when it comes to keeping house prices high.

A tax cut equals a cut in services elsewhere, and I can’t think of any public services that need less money.

To be fair, the same option should apply to renters.

I absolutely do believe it will be housing related tax cuts, they will be meaningful. They will be the final death blow for the public services, especially the NHS before the Tories go.

There’s no such thing as society remember.

I wonder what the percentages of renters receiving housing benefit I reckon it’s bloody high. I was in the category of renting without any government support once and I literally would’ve bought a caravan rather than allow it to continue.

I also think it should apply to renters.

There are a lot of people on Mumsnet who seem to assume everyone who rents gets housing benefit: most full-time working people who rent and don't have dependent children living with them won't be eligible for housing benefit. Their earnings will be too high. However, they could still be paying over £1000 per month on rent.

So many people with mortgages complaining their payment is going up from £450 per month to £900 per month. It's still less than rent, and these people have been paying next to nothing for their housing for years - even if they do have to pay for their own housing maintenance/up keep: I can guarantee it works out less than if they were renting.

If a housing-cost-related tax break applies to mortgage holders it should apply to renters too. That being said, i think it's a bad idea due to reducing tax income and under funding public services.

Fuck that for a laugh.

It's unfortunatly another policy that massively favours the top earners.

For me - I'd get my 20% relief on my £1K mortgage. Grand. But actually, that doesn't quite cover the increase from £750 to £1K increase due to interest rate hike. It might take me out of paying almost any tax or NI - but what would happen in terms of contributions to my pension? Helpful, but has it's problems and I'm a slightly above average earner.

If you're someone earning £100K a year with a £3500 mortgage - well thats £42K a year in mortgage coming off the salary, plus pension. You're dropping out of the 40% tax bracket, you're getting 40% relief on the £42K compared to my 20% on £12K. Plus that's 42K of NI and 10% student loan relief too!

It favours those with higher expenditures, which are the highest earners.

You currently pay for your mortgage on taxed income
Any gains when you move and sell are tax free and not subject to CGT.

Why on earth would the government want to complicate that?... its like bringing back MIRAS which was abolished in 2000 by Labour

Would people prefer to pay CGT on selling but pay mortgage from pre tax income?

I know i wouldn't

You would definitely prefer that scenario if there was no imminent chance of any capital gains though wouldn’t you ? Which does look likely.

From someone who has no assets, owns no property and has no children at the age of 47, that seems quite unlikely.

I don't even really understand what it is.

Got anything else you want to throw at me?

I mean it is insane and totally regressive.

Only 22,000 signatures.
It’s not going to parliament.