Highlights from the recent Tenant Tax Summit

We are inviting you to support our mutually beneficial cause, to raise £250,000 for a legal process called a Judicial Review, with the goal of terminating what we are calling the "Tenant Tax".

Our first CrowdJustice campaign raised £50,000 in just eight days from a standing start - thank you if you pledged. For this next phase, we have set an initial fundraising target of £50,000 and a stretch target of £250,000.  We are confident that this will be achieved with your support. 

Our core aim is to abolish  Section 24 of the Finance (No. 2) Act 2015, which in our view is a tenant tax. This ludicrous legislation will in our view result in rents for affordable homes increasing substantially, extreme pressure being put onto private landlords and providers of social housing and ultimately, even greater numbers of people being made homeless. 

This is about the future of the UK housing market and those who depend upon it. 

It is also about the way that small businesses are taxed and allowed to deduct their costs before calculating their taxable profits.

The imminent imposition of the Tenant Tax could affect everyone who lives in a rented property, everyone who owns one, and everyone who runs a small business.

We now have one final window of opportunity to pursue a legal route to abolish this tax before it comes into effect in 2017. 

WHY THIS MATTERS TO YOU?

Everyone agrees that it is a basic human need to live in a safe, warm and well maintained home - and private landlords were once recognised by the Government as playing a vital role in helping people to meet this need. This tax will have devastating consequences for some of the most vulnerable people in society. Huge numbers of landlords will be forced to raise rents, evict tenants or sell properties in order to pay this unfair and illogical tax, thereby threatening this basic human need for vast numbers of people.

As a result of this new legislation, many thousands of people will also find themselves being taxed on loss-making buy-to-let properties and see massive increases in the percentage of tax payable. Many will find that they will be pushed upwards into a higher rate tax bracket, even though in reality they will not be making a single penny of extra income!

Every single business in the UK is allowed to offset its total costs against its income before being taxed (on its profit). This hugely important accounting and business principle, where INCOME minus COSTS equals PROFIT, no longer applies to individual buy-to-let business owner-operators with finance costs.

If the Government is willing to completely rewrite this most fundamental of business and accounting principles and to reclassify a ‘normal business expense’ as ‘mortgage interest relief’ and make it taxable revenue, who will be targeted next: Corporate landlords? Shopkeepers? All small business owners and entrepreneurs? 

Imagine a business environment where companies are taxed on their turnover or gross profit. Pure insanity! And yet this legislation is applying that very principle towards individual owners of mortgaged residential property! 

But don’t take our word for it - this is what Philip Booth, a Professor of Finance, Public Policy and Ethics at St. Mary’s University, has to say:

“To put it quite bluntly, this is an elementary undergraduate public finance error that should not be made in the Treasury.”

Compelling evidence from a wide variety of sources points to the consequences of this absurd new tax, if it is allowed to take effect in 2017….

• Rents WILL rise!
• Many landlords WILL be forced to sell and evict tenants!
• Homelessness WILL increase!
• AND ALL SMALL BUSINESSES MAY BE NEXT IN  THE GOVERNMENT'S CROSS HAIRS!

For more than a decade, landlords were the darlings of successive governments, helping to fill the void left by their repeated and ongoing failure to build or create enough new homes. However, without warning or consultation, we are now witnessing a devastating and ongoing shock and awe campaign of betrayal of landlords. Our only crime…. taking out mortgages to help finance the purchase of rental property! 

It should be noted that the Government already collects tax on the mortgage interest paid by landlords - it takes it from the profits made by the mortgage lenders. So not only is the Tenant Tax a devious stealth tax that just victimises individual mortgaged landlords and their tenants, it is also a double taxation policy. And this comes from a Government, which, in its own words, is committed to ‘creating a level playing field.’ 

The harsh impacts of the Tenant Tax have been further compounded by other tax measures introduced. These include the increased 3% Stamp Duty levy on the purchase of additional homes, reductions to the wear and tear allowance and changes to Capital Gains Tax that benefit everyone apart from landlords and one other minority group. These unfair and unjust measures, specifically targeting providers of private rental accommodation, are far more likely to lead to the very housing crisis that the Government says it wants to avoid.

If the Tenant Tax is allowed to come into force from April 2017 the negative effects will be felt far and wide, and by millions of people for decades to come. The evidence is there for all to see. We urge you to work with us and help us fight  back. Together we are stronger, and now is our time.

WHAT WE ARE DOING?

We have applied for a Judicial Review, which is a type of court proceeding where a judge reviews the lawfulness of a decision or action taken by a public body (in this case, parts of the Conservative Government).

Our legal challenge is being made on the basis that the Tenant Tax constitutes an unlawful grant of State aid and also breaches rights protected by the European Convention on Human Rights. 

Lobbying and substantial media and PR efforts from many quarters appear to have fallen on deaf ears to date. Sadly, common sense and logic have not prevailed. We therefore believe that the legal route gives us the only realistic chance of success in fighting the Tenant Tax.

Whilst there are no guarantees, we and our lawyers believe that there is a strong case to be made. We think that the law, as well as common sense, are on our side. Ultimately, that decision rests in the hands of the court.

The first phase of our legal challenge is complete. We have worked closely with our lawyers to submit the best possible application for Judicial Review, with well reasoned legal arguments and compelling evidence. We are now awaiting a ruling from the court on whether we will get our day in court to set out our case against the Government in full. In anticipation of our application being successful, the next stage of the fundraising process has started. The sooner we reach our target, the sooner we can prepare the best possible legal case.

WHAT CAN YOU DO?

There are several ways that you can help. The most important of all is to contribute financially by making a pledge. Your funds are the lifeblood of our cause, and without them we will not be able to take our legal fight to the Government to stop the Tenant Tax.

We are running a grassroots, not-for-profit, volunteer-led campaign and as a result your financial pledge will be directed where it can be of most value - towards the legal challenge.  

We are hoping to receive pledges from existing donors, as well as those who have not yet made a pledge. All donations are gratefully received. In the highly unlikely event that our initial target (£50,000) is not met, no money will be debited from your card.

For this fundraising round, we have devised an optional rewards based system, for pledges over £100. 

Financial pledge only   

You can pledge any amount from £1 to £250,000. You can pledge using the options on the left hand-side of the screen and by following the instructions. Your pledge will only be debited from your credit or debit card when we have reached our initial funding target. 

Financial pledge with Tenant Tax Summit complimentary ticket rewards 

We are hosting a big and important event on Thursday 9^th June 2016 in London. Further details regarding this event will be made available to you after you have made your pledge. 

Financial pledge as Tenant Tax Patron 

For those individuals and organisations who will be seriously affected by the Tenant Tax and who really want to engage with our cause, we have created a Patron’s programme. Tenant Tax Patrons will benefit from one or more of the following as desired:

• Invitations to Patrons-only campaign planning and networking meetings and dinners
• Involvement with the planning and delivery of the Tenant Tax Summit
• Greater understanding and engagement with the legal process
• 25 complimentary Summit tickets to share with your network
• Introductions and networking with all other Tenant Tax Patrons

The minimum pledge required to become a Tenant Tax Patron is £5,000.  

Patrons will be contacted once they have made their pledge, or potential Patrons can ask any questions they have by emailing - [email protected]. 

Donations over £5,000 can also be made anonymously, without the need to become a Patron. 

Corporate supporters & Summit sponsors

To ensure that 100% of the funds raised via CrowdJustice go towards our legal challenge, we are offering a range of corporate sponsorship packages for the Tenant Tax Summit.  

The minimum sponsorship pledge required is £5,000 and a range of benefits are available to sponsors. 

Any organisation that wants to provide financial support by way of sponsorship should contact us directly – [email protected].  

Final note on pledges

If you do choose to pledge, your funds will go towards enabling our very experienced legal team to fight the Tenant Tax. At this stage, we cannot guarantee the outcome, or the exact level of funding necessary to pursue our case as far as the law will allow. However, for us the initial fundraising goal is an all or nothing target and we need to meet it, or we will not be able to fight our case in a court of law. Further fundraising campaigns may be launched if necessary as the case progresses. 

Please pledge as much as you can and spread the word. Thank you.

TIMELINE TO TERMINATING THE TENANT TAX

Progress so far has been in line with our expectations:

• A ‘pre-action protocol letter’ setting out our case was sent to the Government in January 2016.
• The Government (HMRC and the Treasury) has responded and intends to defend the action.
• An Application for Judicial Review was filed by our legal team with the court in February 2016.
• HMRC and the Treasury jointly responded to the application by filing an ‘Acknowledgement of Service’ outlining their intended defence.
• Our lawyers responded to the points raised by HMRC and the Treasury.

The process from this stage forward is as follows:

Assuming the judge agrees that our case is 'arguable' - based solely on the papers submitted to the court or following a short hearing - we will be granted permission for a Judicial Review hearing.

We expect permission to be granted by the court in due course, and hopefully in the coming weeks.

A full hearing (usually lasting one to three days) would then be scheduled by the court and would likely be held in the autumn, with the court then responsible for deciding whether the Government's Tenant Tax is unlawful. 

We have started the next fundraising process to enable our legal team to prepare the best possible case. 

Our legal team

We have appointed a world-class legal team of internationally regarded lawyers hand-picked by our legal team at Omnia Strategy. The team is led by Cherie Blair CBE QC, a renowned human rights lawyer, and includes Conor Quiqley QC, an expert in State aid law, and Sarah Hannett, a public law and human rights specialist.

Thank you for your interest in our cause.  Please support by pledging as much as you can and by also directing others to this webpage.  

Thank you. 

Steve Bolton & Chris Cooper

About the claimant

Chris Cooper and Steve Bolton are hard-working property business owners who invested in property as a prudent way of securing a modest pension (Chris) and to provide an alternative income (Steve).Alongside running their property businesses, Chris works for an airline and Steve leads the team at Platinum Property Partners, who provide high-quality, shared and affordable housing for more than 4,000 key workers and working people in England, Scotland and Wales.Chris and Steve believe that the all-out shock and awe campaign from the government against individuals who are providing safe, warm and affordable homes, must be stopped. The ‘Tenant Tax’ will be one of the most destructive initiatives that the UK housing market has ever seen. It will have a negative impact for millions of people for decades to come. For this reason, they are leading a Judicial Review with the aim of abolishing the Tenant Tax.

Fast facts

We are seeking to abolish the ‘Tenant Tax’ (section 24 of the Finance (No.2) Act 2015. This ludicrous legislation will result in rents for affordable homes increasing substantially, landlords making substantial losses, extreme pressure being put onto providers of social housing and ultimately, even greater numbers of people being made homeless. Our cause is about the future of the UK housing market and those that depend upon it. We would greatly value your support to pursue the legal route to try and abolish the Tenant Tax. Thank you.