Steve Bolton and Chris Cooper, the two buy-to-let landlords behind the legal challenge to Clause 24 of the Finance Act 2015, have been informed that the next court hearing – in the process to determine whether the George Osborne’s decision to disallow legitimate finance costs of individuals operating buy-to-let properties in their own name was lawful – will be held mid-September, a month earlier than expected.
For over 200 years, UK businesses have operated under the principle that tax is paid on profit, not expenses or turnover. However, Clause 24 specifically singles out individual private landlords as exceptions to the rule. Set to be gradually phased in from 2017, the new measures could have unintended and highly undesirable consequences.
By taxing landlords on income that doesn’t really exist, they will have no choice but to recoup their losses by increasing rents. By trying to “level the playing field” for first-time buyers, Clause 24 will ensure tenants have less money to put towards saving for a house, completely undermining the whole point of the change.
For the first phase of the legal battle, £15,000 was raised in just a few days. They have since reached their target goal of £50,000, enabling them to now take the case as far as it can go.