Charmaine ******

Unfortunately we are in dispute over the terms of the JV... Read More

... Read More

Thanks Ross, ,

Come on everyone , we must between us all know of someone in Kent and East Sussex who's one or two mortgaged buy to let's will be unviable / Cash negative once these changes bite ? Even if its not you , do you know anyone who fits the criteria??

Alternatively , how can we ask her to present this as an interesting newsworthy item - simply saying landlords will have to pay more tax, or even pay tax on ficticiuos profits , is not an interesting enough story to the general population.

We have an opportunity here, a journalist and a film crew available to us . Can we use our collective brains to use this chance to our maximum advantage ..........

Please get in touch with yor ideas and remember the subject needs to be property in Kent and East Sussex

Thanks to you all.

Charmaine... Read More

... Read More

Hi all ,

Do we know anyone who is landlord with a just one or two leveraged BTL 's and a full time job willing to be interviewed by a BBC tv journalist?.

We need a real life case study along the lines of the Megan Shaw endorsed example /scenario showing a loss on their investment properties to take part in the news item .

Filming is starting next week so pease get back to me quickly if you would be willing to take part .

Cheers

Charmaine... Read More

Hi the e mail address for James Brokenshire MP is

contact@jamesbrokenshire.com

please can as many you as possible get in touch with him as he does seem to be seeking genuine answers from David Gauke and has not simply accepted Mr Gauke's standard mail out.... Read More

Hi All,

I have just received the following e mail from James Brokenshire MP
as a follow up to our meeting

Thank you for meeting with me last week and for sending me a number of pieces of information on the subject as follow up. As discussed, I think the best thing for me to do is to write to David Gauke, sharing a copy of his previous response and asking for responses to some specific questions; namely, when HMRC assesses a property portfolio to be an investment or a business and why the proposed legislation allows characterisation of ownership (ie through a company) to define the underlying activity of whether a business is being conducted or not. I shall also ask him to respond more generally to the points you raise on section 24 of the Finance Bill and raise the issue of the retrospective inclusion of portfolios in the current proposals. I shall let you know what response I receive.

Yours sincerely,

James Brokenshire MP

At our meeting Mr Brokenshire came across as intelligent - he was quick to see the issues and interested in following this up ( unlike Michael Fallon who I met with the following day who came across as going through the motions and not really giving two hoots ).

I wonder if it would be beneficial for other members of this Forum to contact James Brokenshire MP as well , whether or not you happen to be in his constituency , to add weight to the challenge to these proposals.

He may well be one to champion our cause .... Read More

Thanks , this is what I have sent to Mr Fallon MP

Mr Fallon,

Thank you for your time today.

I would like to follow up on one point you made which is “why is it unfair to treat all Landlords the same and reduce relief for all to 20%. "

The only reason mortgage tax relief is at 40/45% currently is because the rental profits are also being taxed at this level. So £1 extra of ANY expense means £1 less profit and therefore 40/45p less tax to pay i.e. tax relief of 40/45. If the rental profits were taxed separately from a persons' other income at a rate of 20% (as incorporated Landlords do), then there would only “tax relief” of 20p for each £1, as is the case for basic rate taxpayers.If we are to pay tax on our deemed profits , (which includes the adding back in of mortgage finance costs thereby artificially inflating profits ) upon which we are then taxed at 40 % or 45%, to then only allow 20% of tax relief on those costs is clear unfair and does not treat all landlords equally. I invited you to read some of the worked examples I provided you with which illustrate the point and I hope these help to demonstrate why to reduce the the tax relief to 20% for all is grossly inequitable and penalises higher rate taxpayer disproportionately. .

I do believe that the terminology being used is causing the confusion. Landlords are not getting “relief”. It is not like MIRAS was, where we deducted mortgage interest from our salaries before the tax was calculated.We deduct interest from our receipts, like landlords in every other country in the EU, and like every other enterprise in the UK. The use of the word ”relief” is designed to confuse people.TheTreasury’s claim that: “By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system.” is the OPPOSITE of the truth. Finance costs incurred by individual landlords will be treated DIFFERENTLY by the tax system. Some landlords will be unaffected, some will pay a levy on their finance costs of up to 20% and possibly lose the personal allowance, and others will pay a levy of up to 25%.This lie brings shame on the Treasury, as its Civil Servants know the truth and is probably the reason why you have been contacted by only three landlords in your constituency , when there are probably hundreds of landlords in your constituency and many thousands across the country who simply do not yet realise how they will be affected by this.

Can you please put this point to the Treasury again .

With thanks... Read More

Hi Can I have your help please .......

before I send it , Is this follow up e mail broadly correct which I intend to send to Mr Fallon MP in answer to his question "why is it unfair to treat all landlords the same and allow relief at 20%"

Mr Fallon,

Thank you for your time today.

I would like to follow up on one point you made which is “why is it unfair to treat all Landlords the same and reduce relief for all to 20%. "

The only reason mortgage tax relief is at 40/45%currently is because the rental profits are also being taxed at this level. So £1 extra of ANY expense means £1 less profit and therefore 40/45p less tax to pay i.e. tax relief of 40/45%.

If the rental profits were taxed separately from a persons' other income at a rate of 20% (as incorporated Landlords do), then there would only “tax relief” of 20p for each £1, as is the case for basic rate taxpayers.

If we are to pay tax on our deemed profits , (which includes the adding back in of mortgage finance costs thereby artificially inflating profits ) upon which we are then taxed at 40 % or 45%, to then only allow 20% of tax relief on those costs is clear unfair and does not treat all landlords equally.

I invited you to read some of the worked examples I provided you with which illustrate the point and I hope these help to demonstrate why to reduce the the tax relief to 20% for all is grossly inequitable and penalises higher rate taxpayer disproportionately. .

Thanks for your help guys.... Read More

Just finished a meeting with Michael Fallon MP. I am seeing all MPs in who's constituency I have a property/ "business" .

He said I was the third landlord he had heard from .

I would say he was broadly sympathetic to the idea of distinguishing professional landlords for whom this is the only source of income and are genuine sole traders from those who have cash to invest and purchase a buy to let as a hobby.

He also acknowledged that to make clause 24 retrospective seems unfair.

He kind of said so what if you don't get any income - you will get capital gains . I explained that this was my only source of income and I need to eat and pay for mortgages and repairs whilst waiting for capital growth / gains upon which I will pay CGT.

He was stuck on the point that reducing the relief to 20% treats all landlords the same so why is that unfair ? I did my best to explain , but not sure if I did a brilliant job. if anyone could rebut this point succinctly I will forward it to him .... Read More

I have just finished a meeting with my MP James Brokenshire. (Immigration minister)

He was not familiar with the workings of Clause 24 of the Finance Bill and said he would find out what it was about. ( ! ). To assist him , I gave him a copy of the NLA appraisal of Clause 24 and the RLA letter to the Chancellor asking for a pause and consultation , and made it clear that this is taxing Landlords on turnover rather than profit, which in turn could lead to tax being payable on a loss and will definitely lead to rent increases.

The main point he picked up and seemed interested in was that if this is a business, and not simply an investment , as HMRC V Ramsey establishes, then it seems unfair that we cannot deduct mortgage interests costs. Also, if we were operating within a corporate structure we could. He raised an interesting point which is that if we all incorporate to avoid this , will the revenue see this as tax evasion if the main reason for holding property in a Limited company is to avoid Clause 24.

He said he would speak to David Gauke and come back to me .... Read More

I have just finished a meeting with my MP James Brokenshire. (Immigration minister)

He was not familiar with the workings of Clause 24 of the Finance Bill and said he would find out what it was about. ( ! ). To assist him , I gave him a copy of the NLA appraisal of Clause 24 and the RLA letter to the Chancellor asking for a pause and consultation , and made it clear that this is taxing Landlords on turnover rather than profit, which in turn could lead to tax being payable on a loss and will definitely lead to rent increases.

The main point he picked up and seemed interested in was that if this is a business, and not simply an investment , as HMRC V Ramsey establishes, then it seems unfair that we cannot deduct mortgage interests costs. Also, if we were operating within a corporate structure we could. He raised an interesting point which is that if we all incorporate to avoid this , will the revenue see this as tax evasion if the main reason for holding property in a Limited company is to avoid Clause 24.

He said he would speak to David Gauke and come back to me .... Read More

1
Challenging government decisions
An introduction to judicial review
UK & EU Public Law and Policy
INTRODUCTION
As the role of the public sector (both as regulator and contracting party) has grown, so has the commercial impact of its decisions become more frequently business-critical. It is, therefore, no surprise that businesses are increasingly often seeking to challenge those decisions in the Courts.
The main legal means by which the decisions and actions of Government departments, regulators and other public bodies can be challenged is judicial review. This note provides a brief introduction to judicial review, focusing on:
• the bodies and decisions that can be challenged;
• the grounds on which decisions can be challenged;
• the remedies available; and
• the judicial review process.
WHAT BODIES AND ACTIONS CAN BE CHALLENGED?
Unless judicial review has been expressly excluded by statute, then any decision or action that contains a sufficient "public law element" is amenable to challenge by way of judicial review. Whether a decision or action is challengeable does not depend solely on the identity of the decision-maker but also on the nature of the decision. Thus, for example:
• a Government department, while obviously a public authority, may do some things that do not contain a sufficient public law element, such as employing staff, and are therefore not amenable to judicial review; and
• conversely, a body that is not obviously "public" may perform some functions that do fall within the ambit of judicial review, such as disciplinary procedures by an industry self-regulatory body.
Decisions and administrative action
Judicial review is, in principle, available in respect of most decisions and actions (however characterised) by Government departments, regulators and other public authorities (including local authorities). In some cases, it may be possible to challenge an authority’s failure to act or make a decision. However, although statutory exclusion of judicial review is rare, a growing number of statutory powers are coupled with specific statutory appeals mechanisms (often to specialist tribunals such as the Competition Appeal Tribunal). As judicial review is a remedy of last resort, these appeals mechanisms usually have to be exhausted first before judicial review can be pursued.
Legislation
Legislation can also be challenged by way of judicial review. Secondary legislation — Orders, Regulations or other statutory instruments made by a Minister, regulator or public authority — can be challenged on the full range of judicial review grounds (as to which, see below). By contrast, primary
legislation (that is, Acts of Parliament) can only be challenged on limited EU and human rights law grounds.
Standing
In order to be entitled to bring a claim, you must have “sufficient interest” in the outcome of the claim. However, the court takes a liberal view of the requirement and will very rarely consider it separately from the substantive issues. It is well established that interested groups and trade associations, for example, may bring claims concerned with their sphere of interest.
ON WHAT GROUNDS CAN DECISIONS BE CHALLENGED?
In a judicial review claim, the Court's job is to decide whether the decision in question was lawful. As such, judicial review is, in most cases, not directly concerned with the merits of the decision (was it a good or the best one?) but with whether the decision was reached in a proper manner and is within the range of permissible outcomes.
Although the grounds are fluid and developing, the main grounds for judicial review are usually categorised as:
• illegality – that is that the decision-maker acted contrary to its or outside legal powers or obligations;
• procedural impropriety; and • unreasonableness. Illegality
A decision may be ultra vires because the decision-maker simply does not have the power (whether statutory or otherwise) to make the decision in question or (particularly in the case of statutory powers) because he has not met the pre- conditions or criteria for exercising the power. These pre- conditions may be procedural or substantive. For example, an Act may provide that the Minister may only take action in specified circumstances; if he acts in a case where those circumstances do not exist, then he is acting outside his powers.
A decision or action would also be ultra vires if it were contrary to EU law or (since enactment of the Human Rights Act) the European Convention on Human Rights.
Procedural impropriety
A decision or action may also be unlawful if the process followed was unfair when judged against the public law standards of procedural fairness. These standards, developed by the Court in case law, apply irrespective of any statutory procedural requirements, but the standard imposed will depend on the circumstances and the nature of the matter: the standard of fairness required in a quasi-judicial context will, of course, be higher than that required when making a routine administrative decision, for example. Aside from rare cases of bias, procedural impropriety may typically arise where there has not been proper consultation or where the defendant has breached a legitimate expectation as to the procedure to be followed.
Unreasonableness
Although judicial review is concerned with the lawfulness and not the merits of the decision being challenged, it has long been accepted that a decision may be so unreasonable as to be one that a decision-maker could not lawfully have reached. Traditionally, this ground has been very limited in its application, with the Court giving public authorities a wide margin of discretion as regards what is reasonable. However, there has been a trend in recent years towards a more critical consideration of the reasonableness of the decision. It is now well-established that the Court is entitled to review the rationality of a decision, that is whether the decision-maker has taken into account the relevant (and only the relevant) considerations. In cases that engage issues of EU or human rights law, the Court's scrutiny in this regard can be more intense, where it is required to consider the proportionality of the decision, which involves the balancing of the various considerations.
Nevertheless, for both constitutional and practical reasons, the Court remains anxious not to substitute its own views for those of the body charged with making a judgment on the matter in question and so will afford the decision-maker a wide margin of appreciation on matters of discretion.
WHAT REMEDIES ARE AVAILABLE?
If a challenge to a Government decision or piece of secondary legislation is successful — that is, the Court decides that it is unlawful on one or more of the grounds outlined above — then it is a matter for the Court's discretion what remedy (if any) should be granted. The Court may:
• quash the decision or legislation;
• order the decision-maker to take a particular action (such
as to reconsult or to grant a licence); and/or
• make a declaration as to the lawfulness of the decision challenged.
In deciding upon remedies, the Court may have regard to public policy considerations such as the costs of unravelling a decision that has already been made and may have affected a substantial number of people. This may lead it to refuse a remedy even in respect of an unlawful decision.
In relation to primary legislation, the Court's powers are more limited: it may only quash legislation if it is found to be contrary to EU law; if it is contrary to the European Convention on Human Rights, then the only remedy available to it is to make a declaration of incompatibility. In practice, such a declaration, and indeed any declaration of unlawfulness, would likely be taken very seriously by the
public sector defendant, who should be expected to remedy the unlawfulness.
Damages are, as a general rule, not available in judicial review proceedings. They may, in principle, be available where a human rights breach is found, but such damages are rare and essentially nominal. However, compensation or other forms of financial redress may naturally flow out of a successful challenge.
THE JUDICIAL REVIEW PROCESS
Compared with ordinary civil litigation, the judicial review process is substantially faster and more streamlined. There are a number of significant features of judicial review that differ from most other forms of litigation:
• speed is of the essence — claims must be made "promptly" and in any event within three months of the decision being challenged;
• it is a two-stage process — a claim can only proceed with the permission of the Court, so unmeritorious claims are weeded out at an early stage before other parties have submitted all of their arguments and evidence;
• there is no standard disclosure procedure — save in exceptional circumstances, specific disclosure is not required, but the parties are under a duty of candour to include in their evidence what the Court requires in order fairly to dispose of the case; and
• there is no oral evidence or cross-examination — save in the most exceptional cases, all of the evidence is given in writing via witness statements.
As with most claims, in accordance with the Pre-action Protocol for Judicial Review, the first step is to serve a letter before claim on the defendant and other parties setting out the legal challenge and stating what action is required. If the defendant does not provide a satisfactory response and the Claimant wishes to go ahead and commence proceedings, it is obliged to file its entire case, including full arguments and all supporting evidence, at the launch of proceedings (and therefore within the three-month time limit) — unlike other litigation, it is not possible to commence proceedings with a bare claim form, or only limited particulars. In principle at least, the claimant cannot expect any subsequent opportunity to submit further evidence.
Once the claim has been lodged with the Court, the defendant has 21 days to file an acknowledgement of service and to indicate whether it will defend the claim and, if so, on what grounds. A judge will then consider whether to grant permission. This is usually done on the papers without a hearing, but if permission is refused, a claimant may request an oral rehearing.
If permission is granted, the defendant has 35 days in which to file its defence and supporting evidence, after which there will be an oral hearing of the claim. In stark contrast to civil litigation, those hearings are short (very rarely more than three days) and usually within six to 12 months of the claim being commenced (sooner in urgent cases).
One of the other specific features of judicial review is that "interested parties" may be joined in the proceedings. These are full parties to the proceedings that are neither the defendant nor the claimant but do have an interest in the outcome of the proceedings. It is often the case that commercial parties are joined as interested parties where a decision in their favour (such as the grant of planning permission or a licence) by a public authority is challenged or where they have been involved in the matter under review.
IS JUDICIAL REVIEW WORTH IT?
Successfully challenging a government decision is difficult, not least because of the wide margin of discretion that the public authority will be afforded by the Court. For this reason, winning the policy debate before a decision is made is preferable. However, judicial review can be a swift, effective and cost-efficient mechanism for challenging an unfavourable outcome. When it really matters, judicial review is a powerful option that can deliver results with enormous commercial value.
Moreover, it is a very powerful tool in the armoury of any business engaging with the public sector, and it is crucial that the relevant public law arguments are deployed effectively, and the groundwork for a challenge laid, long before any decision is made.
OUR UK & EU PUBLIC LAW AND POLICY TEAM
Hogan Lovells' UK & EU Public Law and Policy team brings together in a dedicated specialist team substantial experience of judicial review litigation and of working with clients to influence and shape policy and other governmental decisions at an early stage. As such, we are able to draw on our public law and litigation knowledge to ensure that your case is advocated as strongly as possible before a decision is made. Our experience in bringing high-profile, highly political and highly complex judicial review challenges, and our international network of specialties also mean that we have the skills and resources to act swiftly and effectively in any case.
Hogan Lovells’ [UK & EU Public Law and Policy] team is “our first port of call for smart business-minded lawyers’, say clients of this well-regarded commercial firm.”
Chambers UK 2009
Our Experience
• acting for the Government of Iceland in relation to the UK's actions in response to the Icelandic banking crisis, including potential and actual legal challenges in the UK, European and international courts
• acting for Tube Lines in successfully resisting judicial review proceedings brought by the Mayor of London and Transport for London challenging the London Underground Public Private Partnership
• securing a landmark decision for a number of UK tobacco companies annulling an EU Directive on tobacco advertising, on the basis that the Community had exceeded its powers, following a reference to the ECJ and an interim injunction against implementation
• acting for T-Mobile in parallel judicial review and Competition Appeal Tribunal proceedings in relation to the proposed auction by Ofcom of 4G radio spectrum, including an appeal to the Court of Appeal regarding the UK's implementation of European law rights to an effective remedy, and novel judicial review proceedings in the Chancery Division
• acting for a central government department in relation to judicial review and procurement challenges to the procurement of a major PFI project, including applications for interim relief and jurisdictional disputes
• successfully resisting the first ever judicial review claim against the Financial Services Complaints Commissioner
• acting for Ofgem in successfully resisting the first ever Energy Code Modification Appeal to the Competition Commission
• successfully resisting a challenge by a local interest group to the grant of planning permission to our client, Argent, for the redevelopment of King's Cross, one of the most high profile urban regeneration schemes in Europe
• acting for cross-Channel UK ferry operators in successfully resisting a challenge by Eurotunnel to the continuation of the EU duty-free regime
• acting for National Air Traffic Services in successfully resisting a judicial review challenge, on environmental and human rights grounds, to a major redesign of UK airspace
• acting for the British Casino Association in its judicial review challenge to the introduction by the Department of Culture, Media and Sport of "super-casinos" under the Gambling Act 2005
• intervening on behalf of the Australian Government in judicial review proceedings concerning a challenge by British expatriate pensioners to UK pensions legislation on human rights grounds... Read More

Hi ,

i just found this on the subject of judicial review . On the face of it There is a possibility of challenging unreasonable government decisions but note the caveat about winning the public debate first. And the need for quick action . The will of parliament would not be overturned by Judicial Review so would need to be done before the parliamentary vote .

One of the remedies is further consultation before implementation

http://www.hoganlovells.com/files/Publication/a8ffdcb9-80ec-4c53-af03-44cfe21e1fc2/Presentation/PublicationAttachment/3fa900dd-e9ac-4772-a90d-4cf92b45e7b8/Challenging_government_decisions_in_the_UK.pdf... Read More

... Read More

Can some one help me please . The more i read on this thread, the more and more confused i become . I fear I have lost the plot and no longer fully understand the actual impact of these proposed changes.
I woke up this morning to the most recent Landlord Today newsletter and could be forgiven for thinking that all of this was just a bad dream and it is business as usual
- up to 4 million 18-39 year olds still looking to acquire a buy to let property
, Newcastle Building society launching itself in the buy to let market,
The housing minister back tracking on Long Term Tenancies etc etc .
On top of all that , I had a conversation with my specialist buy to let mortgage broker yesterday whom I have used for many years and she said there had been no slow down in her volume of business recently .... Having said that I don't think she has understood the proposed changes and I don't believe her clients have either.
I am not especially thick or stupid and do have a few academic qualifications worth hanging up in the downstairs loo, but I simply do not fully understand anymore . I thought I had a good grasp of this but now I am not so sure .
Can someone please help summarise the impact in a way which I can understand and relay to my friends, fellow investors , family members etc , in particular incorporating this statement "Any excess finance costs may be carried forward to following years if the tax reduction has been limited to 20% of the profits of the property business in the tax year." as this was the final straw of confusion . There must be plenty of people who are thinking the same but don't want to look dumb by asking .
Thank you for your support and help.... Read More

This is the relevant section of text which UPAD are circulating today

Newspaper columnists have been making hay following the buy-to-let tax changes announced in the most recent Budget, predicting that the measures would put landlords and the sector into reverse gear.

But the picture is more subtle. While many landlords may face higher tax bills, the increase will depend on the size of your buy-to-let mortgage, if you have one, how much you depend financially on the HMRC’s ‘wear and tear’ allowances and which tax bracket you’re in. So are the changes going to severely impact the sector or just tighten margins for some?

Mortgage interest relief

In summary

For many years landlords have been able to claim a percentage of the mortgage interest they pay against their personal tax liability. And the higher their income, the greater the tax relief they could claim. After a staggered introduction,this will be standardised from 2020 onwards when landlords will only be able to claim relief on mortgage interest at 20% regardless of their personal tax rate, (and therefore only 40% and 45% tax rate payers will be hit).

The impact

On face value it looks bad for landlords. For example a landlord who pays tax at 40% and used to claim £9,000 a year mortgage interest against their tax will be £1,800 a year worse off in four years’ time. But it won’t affect everyone. Allegedly, less than half of landlords have a mortgage, according to data from the Council of Mortgage Lenders and Paragon Mortgages (although some of the cynics amongst you may suggest not every landlord has a BTL mortgage...). Plus the new rules will only impact landlords who pay tax at 40% or above. But the average annual rental of a landlord is £12,000 p.a. which, together with an average salary of £27,600 (60% of landlords run their properties in addition to a job) means some landlords will stay out of the 40% tax bracket. Also, 21% of landlords, according to recent government research, don’t take an income from their property and therefore don’t pay tax.... Read More

I have just received an e mail from UPAD , the on line Landlord self service letting agency distributing an article in todays newsletter basically saying it won’t affect most landlords that much.

Dose anyone know James Davies the founder of UPAD as this sort of mis-information is harmful to our campaign and attempts to minimise the impact of the proposed budget changes rather than highlighting the disasterous consequences . We need him to be emailing his data base with details of the petition and not sending out blogs like this... Read More

http://blog.upad.co.uk/blog/is-buy-to-let-still-a-good-idea-after-the-budget?utm_campaign=newsletter&utm_source=hs_email&utm_medium=email&utm_content=21321388&_hsenc=p2ANqtz-8do9Fw_GfgmaTp3PYRpz8um_y3Xaoln__b8crk5P_Br8Q74mMokmuJV7rv69MdBmVKxmhgycMVykYOJ0CklaikhJEong&_hsmi=21321388... Read More

This is the link to the newsletter

http://blog.upad.co.uk/blog/is-buy-to-let-still-a-good-idea-after-the-budget?utm_campaign=newsletter&utm_source=hs_email&utm_medium=email&utm_content=21321388&_hsenc=p2ANqtz-8do9Fw_GfgmaTp3PYRpz8um_y3Xaoln__b8crk5P_Br8Q74mMokmuJV7rv69MdBmVKxmhgycMVykYOJ0CklaikhJEong&_hsmi=21321388... Read More