Cherie Blair is set to challenge the Government’s buy-to-let tax relief changes in court, arguing it breaches human rights.
A campaign started with by two landlords, Steve Bolton and Chris Cooper, has contacted legal firm Omnia Strategy, which is led by the wife of former Prime Minister Tony Blair, for legal opinion and has been told it has a “reasonable chance of success”. The campaign has so far raised over £50,000 via the website Crowd Justice.
Blair’s team has written to HMRC calling for a judicial review of the Government’s policy change, which will see buy-to-let tax relief gradually reduced to the basic rate of tax from April 2017.
The Government’s new policy will prevent landlords with mortgages from offsetting mortgage interest costs against rental profit before calculating tax, which goes against the “fundamental business principle where income less costs equals profit”, argues the legal team.
The legal challenge argues that the Government’s move breaches the European Convention of Human Rights and that it constitutes unlawful grant of state aid to corporate landlords.
Bolton says: “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 per cent 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.”