Two landlords seeking to fight Government plans to raise taxes on buy-to-let investments have raised more than £50,000 in less than 10 days.
Private landlords Chris Cooper and Steve Bolton launched a campaign via crowdfunding website Crowd Justice on 26 December, and have already secured the support of more than 740 donors.
The pair hope to secure a judicial review of specific clauses of the Finance Act 2015, through which the Government installed changes which prevent landlords from being able to offset mortgage interest costs against rental profits before tax is calculated.
The National Landlords Association has previously warned that the reforms “could add billions to rents”, while a parliamentary petition to scrap the changes launched in the summer has secured 47,497 signatures.
The pair are arguing for the review on the basis that the reforms would leave landlords alone in being unable to offset costs against their income before being taxed on their profits.
They say: “The Summer Budget changes this very fundamental and important business principle.
“However, it only does so in a way that just discriminates against individual buy to let business owner-operators, who have mortgages/finance costs.
“As a result of this change, many thousands of people will find themselves being taxed on loss-making buy-to-let properties, see massive increases in the percentage of tax payable and many will find that they will be pushed upwards into a higher tax bracket, even though they may well not be making a single penny of extra profit!”
The landlords hope to submit a “pre-action protocol letter” to argue their case to the government this month, with a formal application for judicial review later this year.
The Government would then have 21 days to respond to the application before a court decides whether it is granted.
If approved, a hearing would then be scheduled by the court, after which a ruling would be made.