Two buy-to-let landlords who launched a kickstarter to fund a legal challenge against George Osborne’s new tax regime, have hired Omnia Strategy LLP in order to take on the Government on the grounds the new policy breaches their human rights.
The landlords in question, Steve Bolton and Chris Cooper, raised £50,000 from 737 backers to challenge the policy change, hiring Cherie Blair’s firm to issue a pre-action protocol letter to HMRC calling for a judicial review.
The pair say they expect a response by 10th February. They also say they believe they have a “reasonable chance of success.”
The new policy (Section 24 of the Finance Act 2015) will prevent landlords with mortgages from offsetting mortgage interest costs against rental profit before calculating tax.
Steve Bolton and Chris Coope say the legal challenge is being made against the new policy using the European Convention on Human Rights, arguing it “constitutes unlawful grant of State aid to corporate landlords and to the owners of commercially let holiday homes contrary to articles of the Treaty on the Functioning of the European Union.”
Landlord Steve Bolton said: “This tax grab is unfair, undemocratic and underhanded, and we believe it is unlawful on a number of points. In no other business are costs wholly incurred to fund the business liable for taxation. In addition there is no substantiation in the Government’s proposal that the changes will create a level playing field between homeowners and buy-to-let landlords.
“The change discriminates against the typically smaller landlord who may incur effective tax rates of over 100% while making an economic loss, and gives an unfair commercial advantage to many other categories of landlord unaffected by the change. We are therefore delighted that our legal challenge has progressed to the next stage and look forward to receiving the Government’s response.”
