Landlords’ hope of Tenant Tax judicial review axed by court decision

Lawyers and landlords led by Cherie Blair were denied a full judicial review of Section 24 of the Finance (No. 2) Act 2015, or the Tenant Tax, following the Administrative Court’s decision today.

The legal team at Blair’s firm Omnia Strategy LLP, representing Steve Bolton, Chairman of Platinum Property Partners, and fellow landlord Chris Cooper, on behalf of the “Axe the Tenant Tax” coalition, argued that Section 24 is unlawful.

The new rules, which will be phased in from April 2017, stop landlords from being able to deduct their mortgage interest costs from their rental income before calculating their tax bill – effectively leaving buy-to-let investors paying tax on turnover, instead of profit. The coalition argued that this restriction on landlords’ ability to deduct finance costs as a business expense could constitute an unlawful grant of state aid to corporate landlords and owners of commercially let holiday homes, and may also breach the European Convention on Human Rights.

Cherie Blair CBE, QC of Omnia Strategy LLP, said: “The Court’s decision that our clients’ legal challenge should not proceed is very disappointing. Steve and Chris, and many others, have dedicated a lot of time and energy into putting forward the best case possible. We know the case has been supported and followed with interest by a large number of individual landlords. Many of these landlords now face challenging times ahead.

“From the outset, the legal process was just one aspect of our clients’ fight against this unfair measure. Together with their impressive and growing coalition, they will continue to engage with the Government, and the legal team wishes them every success.”

The ‘Axe the Tenant Tax’ coalition, which represents over 150,000 landlords, has vowed to continue to oppose the legislation, by launching its third crowd-funding campaign in an attempt to abolish the planned legislation by putting political pressure on MPs and Government through lobbying, PR and integrated media.

In a joint statement, Mr Bolton and Mr Cooper said they were “outraged” by the court’s decision: “From April 2017, the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50 per cent over a three year period, will be felt far and wide. Sadly, it will be tenants who are hit hardest; they are set to see unprecedented rent increases over the coming months and years, which will be a very clear and direct consequence of this ludicrous legislation.

“Now that the legal route has run its course, we will be focussing 100 per cent of our attention and resources on taking our case more forcefully, more powerfully and more directly, right to the heart of Government. Our goal is simple: to abolish this tax or to remove the retrospective nature of it.

“We will be launching a range of lobbying, media and grass-roots activism measures over the coming days and weeks. We will also be encouraging all of our landlords to write to their tenants if they have to increase their rents or sell up, clearly explaining that it is this Conservative tax policy that has forced them into this situation.”


Cherie Blair’s landlord tax challenge gets October court date

16th September 2016

Cherie Blair will lead a team of lawyers and landlords to court this October as they continue a challenge to tax changes that will hit landlords next year.

The new rules, which will be phased in from April 2017, stop landlords from being able to deduct their mortgage interest costs from their rental income before calculating their tax bill – effectively leaving buy-to-let investors paying tax on turnover, instead of profit. Even with a 20 per cent tax allowance, landlords will be hit hard by the change, pushing some into higher tax brackets, leaving others making no profit and giving many no choice but to raise rents.

A campaign to overturn the law via a judicial review began last year, founded by landlords Chris Cooper and Steve Bolton. Now, the Axe the Tenant Tax campaign represents more than 150,000 landlords, who, in turn, provide housing for more than 1 million tenants.

Their challenge, which is led by a legal team from Cherie Blair’s firm Omnia Strategy LLP, now has a court date of 6th October. The permission hearing will see the group set out their argument for the judicial review, before a judge rules whether it can proceed.

The hearing will start no later than 11.30am and take around 90 minutes, longer than the norm for a judicial review hearing, which the campaign organisers say is a “positive development”. Indeed, the group recently met Housing Minister Gavin Barwell for a “productive” meeting in which they outlined their concerns about the new law’s potential impact upon tenants, as well as the property market.

So far, the Axe the Tenant Tax campaign has raised more than £100,000 to fund its challenge.

For more information on the campaign, or to find out how you can attend the court hearing to support the judicial review, click here.


Tenant Tax judicial review gets September court date

3rd August 2016

The campaign for a judicial review of the UK’s planned “Tenant Tax” has been granted a September court date, which will decide whether the campaign can proceed to overturn the unfair buy-to-let law change.

The new tax rules, set out in Section 24 of the Finance Act 2015, will mean that from April 2017, landlords will no longer be able to offset their mortgage interest from rental income before calculating their tax bill, effectively forcing landlords to pay tax before profit – a move that would go against standard business practice and also leave smaller landlords potentially making a loss.

With buy-to-let investors having no choice but to pass the hiked costs onto renters, the industry has rallied to stop what will effectively be an indirect tax by the government on tenants.

After months of legal applications, letters and a summit in London, the Axe the Tenant Tax campaign has now announced that it has been granted a court date for a permission hearing. This will take place on 14th or 15th September and will see the court decide whether the team can proceed with their legal challenge.

If permission is granted, the judicial review will go to a final hearing that will let the landlords fight their case in court.

“Our legal team are now hard at work attending to the remaining preparations for the permission hearing, and together, we are confident that our case is strong enough to progress,” say Steve Bolton and Chris Cooper, the landlords leading the Axe the Tenant Tax campaign.

Before that date, they also have a meeting with Gavin Barwell, the UK’s newly appointed Housing Minister, to raise their concerns about the impact of Section 24 and make him aware of their legal challenge.

At the same time, the Axe the Tenant Tax group is also fundraising for the services of a communications agency to carry out a PR campaign to drive awareness and support of the judicial review.

“We have been clear from the start that for our legal challenge to have the best chance of success, it has to be supported by a professional communications, media and lobbying campaign,” add Bolton and Cooper.

To donate to the cause, click here, and to follow the campaign’s progress, like their Facebook page.

What is the Tenant Tax and how does it affect you? Find out more information about the law, its implications and the fight against it here.