Landlords leading the campaign against Section 24 of the Finance (No. 2) Act 2015, also known as 'the Tenant Tax', have vowed to continue to take their case to the Government, following the Administrative Court's decision today to not grant permission to proceed to a full judicial review hearing of the legislation.
Cherie Blair CBE, QC of Omnia Strategy LLP, who represented co-claimants Steve Bolton, Chairman of Platinum Property Partners, and fellow landlord Chris Cooper, on behalf of the "Axe the Tenant Tax" coalition against HMRC voiced the disappointment that will be felt across the country:
"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."
In a joint statement, Mr Bolton and Mr Cooper commented:
"We are outraged by the Court's decision today. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of Section 24.
"From April 2017 the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50% 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.
"For many, it will also mean the loss of their homes because vast numbers of landlords will be forced to exit the market. Hard-working, responsible landlords will have their pension plans in ruins, but the large corporations and the wealthiest in society, who can buy property without the need for mortgage finance, are systematically excluded from this unfair tax policy.
"Now that the legal route has run its course, we will be focussing 100% 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."
'Axe the Tenant Tax' is a crowd-funded coalition of individuals and organisations who represent more than 150,000 landlords, who in turn provide privately rented accommodation to more than one million tenants. Their campaign's focus is supported by a broad range of influential figures and experts, from MPs to the Institute of Fiscal Studies, the Institute of Economic Affairs and the Institute of Chartered Accountants in England & Wales*.
The legal team at Omnia Strategy LLP argued that Section 24 is unlawful on the basis that the restriction on landlords' ability to deduct finance costs as a business expense may 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.
The Axe the Tenant Tax coalition has now launched its third crowd-funding campaign to raise money for an integrated media, PR and lobbying campaign. Their aim is to attempt to abolish the planned legislation by putting significant political pressure on MPs and Government.
Axe the Tenant Tax has already broken two legal crowd-funding records with in excess of £180,000 being raised in record time. Bolton and Cooper are now raising additional funds to continue with their fight.
For further details and to make a donation, please visit: www.tenanttax.co.uk
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