Summer Budget 2015 – Landlords Reactions

Entirely as expected - completely fails to address the points that have been made.

Re. literally boiling blood, Calm Down, Dear 😉

Reply to the comment left by "Jerry Jones" at "27/08/2015 - 14:56":

Well, some of us have put our heart and soul into this campaign, Jerry, and naturally feel strong emotions when faced with these ridiculous messages from Government (don't call me 'Dear' by the way.).
We will just carry on, as we have done with every obstacle thrown in our way. I believe we're going to thrash this, bit by bit. But I really hate the Orwellian nonsense they come up with. Maybe Richard Dyson could pick up on the Orwellian theme... that could be good.

Hi Mark,
I’ve been reading the Telegraph article comments with interest. Many commenters like the fact that they believe tenants will rush to buy homes as Landlords sell up.

I think someone (You, NLA, RLA, Shelter?) needs to survey existing tenants to ask them will they buy in a scenario where their Landlord sold up and house prices crashed by say 25%. And what are the big hurdles they need to overcome ie deposit, affordability etc.

Imho not one of my tenants will buy. And the reason? They either don’t want to buy or are unable / unwilling to save for a deposit.

The deposit is the first hurdle that prevents them from buying, NOT the competition from Landlords hoovering properties up.

I had a think about each of my tenants and I believe their responses would be ....

Tenant 1: Can’t afford a deposit, been saving for years, both on min wage but i phones, big tvs, pubs and takeaways keep getting in the way
T2: We’re Polish and are saving to buy a home in Poland. Don’t want to buy here.
T3: I’m on benefits, with a slightly excessive liking for wine and I work 16hrs min wage. How long before I can save the deposit? Hic.
T4: single pensioner, death, arthritis on benefits. WHAT? Feck off asking daft questions.
T5: 30 yr old single guy. I spend money on beer and chasing women. Savings is zero. Wages all spent by Tuesday. Why would I want a millstone like that round my neck?
T6: We’re 40 somethings, and have to pay our rent weekly in cash otherwise we spend it. How would we ever save for a deposit? PS can I miss this weeks rent if I promise to pay double next week?
T7: single mum with 3 kids. I'm struggling to save up for school uniforms at the mo - what do you think?
T8: Working professional good income. Want to move back North next few years and buy up there. Renting at mo gives me the flexibility I need.
T9: working couple living in cuckoo land and on HB. Yeah definitely – the banks won’t mind about all our CCJs will they? I could pawn my Xbox and some Argos jewellery if I need to raise some readies.
T10: Don’t speak a word of English so have no idea what they said or how they would ever get a mortgage.
T11: Young lad on ESA / HB with a broken hand from some recent fighting. I don’t think they give mortgages to people like me.
T12: On long term contracts. My work moves me round so I don't want to buy.
T13: Sensible Young couple. We’ll see how we get on living together for a while before rushing into anything. Maybe when / if we get engaged. Aaaah sweet.
T14; Young family. No Way. We’re waiting for a council house– our quest for the holy grail. Been on it 10 years so must be getting near top now.
T15: I already own house. It very nice house. In Portugal and I can't afford to live in it. Or sell it. That's why I rent of you.

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

Most Landlords who are employed and are also parents will lose Child benefit. I have an email from Megan Shaw, HMRC confirming this Not sure if her example will format properly or not on here).

Megan’s example shows the budget change pushing a Landlord’s Taxable Income over £50k. This is the threshold where Child Benefit starts to be clawed back. At £60k there is a cliff edge which removes all Child Benefit https://www.gov.uk/child-benefit-tax-charge/overview If the person in her example had children they would pay even more tax than her example shows. ie if they had 3 kids they would have a clawback on their £2500 Child Benefit.

It’s going to effect a lot more people than we realise.

Dear Roanch21, Many thanks for your email and sorry for the delayed response.
This change alters the way that your total income subject to tax is calculated, so this will affect whether some people are subject to the High Income Child Benefit Charge.

Here is an example to demonstrate the change:

Before Restriction (16-17)
£
After restriction (20-21)
£

Salary
40,000
Salary
40,000

Property income 15,300
Property income 15,300

Less Other costs (3,300)

Less Other costs (3,300)

Less Finance costs (10,800)

Less Finance costs (0)

Property profits
1,200
Property profits
12,000

Taxable income
41,200
Taxable Income
52,000

Less Personal Allowance
(11,000)
Less Personal Allowance
(11,000)

Tax due on
30,200
Tax due on
41,000

Tax @ 40%
3,600

Tax @ 20%
6,040
Tax @ 20%
6,400

Total Tax
6,040
Total Tax
10,000

Less Finance Costs @ 20%
(2,160)

Final Tax
6,040
Final Tax
7,840

Megan Shaw
Product Owner - Property Income & REITs
HMRC, Room 3/64, 100 Parliament Street, London, SW1A 2BQ
03000 585628

Reply to the comment left by "Ros ." at "27/08/2015 - 15:01":

Sorry if the Michael Winner reference passed you by - no offence intended. I, like everyone else appreciate the hard work.

It's stunning the extent to which that government reaction completely fails to engage on any of the points having been made. My own suspicion is the Judicial Review will go the same way as the action against the building society that Mark put so much effort into a few months back, again with no sensible reaction to the case being made.

I really belive that our best course is to each try to get our MPs to understand the consequences of what is being done. I am convinced that most of them have no idea how it will work and have swallowed the Chancellor's argument hook, line, sinker and copy of Angling Times.

They are making a lot of the fact that "only 18% of individual landlords are expected to pay more tax as a result of this measure"

Hi John,
Don't increase your blood pressure. The response should have been expected and you can see from the tone & wordings that most of it is the cut and paste from GO text.

Do think that getting more than 10,000 names on the petition any Government will change their policy ?

Besides our cause. Can you imagine if the ;policy is changed by 10k clicks. We would accuse the Government to be week.

The fight carries on and my stance will be to take the matter to what ever level we need to take.

Good to see the Telegraph featuring the BTL tax again today.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10946303/How-to-maximise-your-buy-to-let-profits-by-paying-less-tax.html