Two private landlords have launched a campaign to challenge Chancellor George Osborne’s plans to cut the amount of mortgage interest that buy-to-let landlords can claim against tax.
Chris Cooper and Steve Bolton are seeking a judicial review of Clause 24 of the Finance Act 2015.
Angry Landlords Hope to Tackle George Osborne
The changes were announced in the summer Budget, meaning that landlords will be taxed on turnover, not profits.
Some landlords could find themselves in a higher tax bracket and could even pay tax when they are making a loss.
Opponents believe that the changes target smaller landlords, with wealthier investors without mortgages and companies not affected.
Cooper and Bolton claim that Clause 24 breaches human rights and/or EU law.
Landlords have warned that as a result, rents will be pushed up, harming private tenants.
The pair had hoped to raise an immediate £15,000 and a further £35,000 on the website Crowd Justice.
The total £50,000 target has now been met.
Cooper and Bolton hope to tackle the changes, as they believe the new law breaches “a long-established principle of taxation that expenses incurred wholly and exclusively for the purpose of the business are deductive when calculating the taxable profits”.
Cooper is a part-time landlord and Bolton is the founder of Platinum Property Partners, a buy-to-let training franchise firm.
Bolton comments: “It’s not clear why the Government has chosen to just launch an attack on buy-to-let owner-operators with mortgages. It’s a tax from Alice in Wonderland – truly absurd and divorced from real life. Not only is this tax grab unfair, undemocratic and underhanded, but we believe that it could also be unlawful.”1
The pair plans to hire Omnia Strategy to challenge the Chancellor.
A pre-action protocol letter will be sent to the Government this month, with an application for judicial review to be issued by 17th February.
A petition against the changes has also been launched. It is currently almost halfway to forcing a Parliamentary debate on the issue and will close on 27th January.
The crowdfunding page can be found here: https://www.crowdjustice.co.uk/case/clause24/
And the petition is here: https://petition.parliament.uk/petitions/104880