Summer Budget 2015 – Landlords Reactions

Here is a surprisingly simple and efficient way for members of Property118 to boost the campaign against Clause 24. I did this yesterday and it took me about 2 hours.

We have a problem in that lots of landlords are not a part of online communities like this. But we know that lots of landlords advertise their property online.

What you do is type a message in Word consisting of the following:

1) An initial intro to make the recipient read the rest of the message like this: "Dear Sir/Madam, Though I am not writing to you regarding your property vacancy, this message concerns a matter likely of even greater importance to yourself."

2) The briefest possible explanation of what Clause 24 is and the danger it poses to landlords, with an invitation to visit the Summer Budget 2015 - Landlords Reactions page on Property118 for the full information and to download the included spreadsheet. You won't be able put the page's URL, just describe where they need to go. Also, your explanation of Clause 24 needs to be sharp and to the point, so it makes them find Property118 and the full information for themselves.

3) A request that they sign the petition. Again you can't put its URL, so instead tell them how to find it using Google: "buy to let petition"

4) A request that they pledge a donation towards the legal action to overturn Clause 24. They can find this page via Google by inputting "clause 24 crowd justice".

5) A recommendation that they arrange a face-to-face meeting with their MP or write to him/her if that is not possible, describing the impact of Clause 24 upon their financial position and tenants.

6) A recommendation that they write to George Osborne and David Gauke also describing the impact of Clause 24 upon their financial position and tenants.

7) A request that they send the above instructions to every landlord, letting agent and mortgage broker that they know.

I recommend that you number and space out the action list so that it is clear.

When your message is typed, go on to Gumtree and bring up a list of all properties/rooms to rent in your county. You can do this by specifying the location and leaving all of the property criteria blank.

Then you simply reply to every single advert, pasting in the message described above. In-paste-out, in-paste-out, in-paste-out. In a couple of hours you'll have powered through every advert (leaving those repeated by the same advertiser) and sent a message to every landlord/agent advertising on Gumtree at this present moment.

If someone sends you a reply, you will be able follow-up with the actual URLs of the above or further actions (i.e. e-mailing members of the press). That's because by that stage you'll be messaging through your regular e-mail app instead of Gumtree itself.

If every member of Property118 were to do this, we could increase awareness of Clause 24 and the campaign exponentially.

Joint Statement from Steve Bolton & Chris Cooper regarding the Clause 24 legal action:

We are repeatedly being asked three key questions regarding the "Alice in Wonderland" tax grab Judicial Review situation. The following joint statement should clarify our answers to the questions. We welcome questions, comments and feedback, that are both supportive and critical in nature...

The three questions are:

1. Who is behind this action?
2. What are we doing to work with other organisations?
3. What is the likelihood of success?

1. Who is behind this action?
Together, we (Chris and Steve) formally commenced legal process towards a proposed Judicial Review of Clause 24 (C24). The Board of Platinum Property Partners also supported the decision and signed off on a number of matters that could have potentially negative legal, financial and reputational implications for the organisation. This all happened before the campaign went live and any money was pledged.

Prior to this, a huge amount of work had been done by those behind the "Say No To George" petition, which has over 46,000 signatures, the teams and members of Property118 and Property Tribes, the ICAEW, the RLA, the NLA and many other organisations. All have been very positive and proactive in their own ways and helped to move the agenda forward. We applaud and thank anyone and everyone who has played their part, large or small, to move this agenda forward. There are scores of “unsung heroes", many of whom have worked tirelessly and invested hundreds of hours of time to fight this unfair tax. Chris and I are just small, bit-part players who have come forward to push ahead with a new initiative, when compared to many others who have been working tirelessly for the last six months (and continue to).

As of 1am on Boxing Day, we started to represent a broader group of stakeholders in this action. Namely the 360 (and rising) people and organisations who have contributed over £26,649 in under 36 hours over a bank holiday weekend. We are very clear that we represent those people who have committed funds to this campaign and we must act in accordance with the case we set out on the Crowd Justice page https://www.crowdjustice.co.uk/case/clause24/. Any deviation from this would not be in line with correct principles of corporate governance, to which we are committed towards upholding.

2. What are we doing to work with other organisations?
We started out with, and will continue to have, an 'inclusive' approach. Our goal is to build a "property coalition" - bringing together organisations and individuals to fight a common cause, which is Clause 24.

We are aware of other positive actions and activities being considered, or taken by a range of other organisations. Our message is very clear - "let's work together."

Dialogue has already started with a number of organisations. We would like to engage with more organisations who support the principle of challenging C24 and who have substantial reach and influence in the sector. If you are one of those people in one of those organisations, or you know someone who is, please ask them to email us so we can start a dialogue: s.bolton@platinumpartners.co.uk. As the old but very wise saying goes...

"None of us is smarter than all of us"

Steve was interviewed by the Guardian newspaper last week (http://www.theguardian.com/business/2015...f-changes) and the point was debated that not many landlords care about this issue, and so why should the government or anyone else. The truth of the matter is that we either need to come together, or just have to sit back and accept - not just Clause 24, but the increasing number of taxes and laws that are going to have devastating consequences if the government continue unchecked with their current direction of travel. The time to act and come together better than we have ever done before is now. Full engagement with C24 is a catalyst and common cause that can unite an industry if we choose collectively to make that happen. The cynics say we have no chance, but nothing was ever achieved with a defeatist attitude from the outset.

3. What is the likelihood of success?
In a legal sense, our chances of success with C24 are slim. However, for many property business owners, this tax will be devastating. There are many stories where people will have their plans for retirement in tatters as a result of this unfair tax. Humanising this angle is one of our goals, and Chris has kindly agreed to share his story with national media this week. This story and more like it, will hopefully start to make more people realise that this tax is unfair, unintelligent and unjust. Facts and figures are helpful, but stories have always been the most effective means of influencing hearts and minds.

We believe, as do our legal team, that the Crowd Justice campaign “Judicial Review of Clause 24” could potentially have benefits even if an application for JR is refused or, if granted, fails. The campaign will:

Raise awareness amongst those landlords who are unaware of Clause 24, or the disastrous effects it will have on them.
Raise awareness amongst those in a position of influence, in the Houses of Commons and Lords, who are also unaware.
Stimulate discussion which will have the likely affect of bringing the Clause 24 topic back onto the Political agenda.
Raise our profile positively in the national media and start to fight against the demonization of the ‘parasitic landlords’, as the critics like to call us.
Make an industry-wide coalition a viable possibility and an idea worth pursuing.

Next Steps..
We have no vested interest in this beyond the ones we make clear on the campaign page. Any questions relating to transparency and potential for conflict will be welcomed and answered openly in the public domain. We have nothing to hide and no hidden agenda.

We plan to answer as many questions as time allows via all social media channels, so please join the conversation and please keep spreading the word.

The funding campaign needs to hit the £50k target within the week, to make a really positive statement of intent, so please encourage others to donate.

Let’s keep the total rising day by day and have all the money in the bank by Friday at midnight latest. Broad engagement with as many people voting with their wallets is the key goal here initially. Please do not fund more than you would be happy to lose, and do so on the basis that you won’t regret the financial loss if the action fails. We, and the lawyers, will do all in our power to make sure that does not happen but it is always better to hope for the best, but plan for the worst. The chances of success are slim but giving up with no hope is not the answer. The spin-off benefits alone listed above, could be worth more than the action itself to us as a community. So please engage as many people as you can and donate.

Further down the road, the idea for a “property coalition" could expand its scope and influence, but that conversation is for another day. For now, our eyes are fixed firmly on the legal challenge to the C24 prize.

We will update everyone via all social media channels on a regular basis.

A massive festive thank you to everyone who is supporting this action.

Steve Bolton and Chris Cooper

Reply to the comment left by "Chris Cooper" at "27/12/2015 - 22:59":

Great job!

As an added point...

The coalition idea is one I have seen work amazingly well for Peace One Day, led by my very good friend, Jeremy Gilley, the Founder.

Having worked with Jeremy for the past 8 years and having seen what he has done to essentially make POD a world-leading marketing and brand umbrella for the concept of peace, there are many lessons we can bring across from that organisation. Coalitions were one of only a few key strategies that led to their incredible success.

I believe in standing on the shoulders of giants and POD are a giant in the coalition area:

http://www.peaceoneday.org/coalitions to find out more about what coalitions done well look like.

I know that Jeremy would be willing to guide and support us in creating this type of coalition and sharing the key learning points that have made POD a global leader in this field.

I'd be interested in others thoughts on the idea.

Reply to the comment left by "Steve Bolton" at "27/12/2015 - 23:39":

Steve, have you considered engaging with major Buy To Let lenders such as Paragon Mortgages to support our cause?

As I recall their director John Heron spoke against this forthcoming legislation.

A chap on another forum has sent the below letter to the letting agents he is dealing with. I thought I'd copy and paste it here for anyone looking to do likewise.

"Request for help in raising landlord awareness of future divisive tax on property investment caused by Clause 24 of the last government budget.

Today, I have been made aware of a crowd funding initiative that intends to raise a judicial review of Clause 24. I request your help by communicating this initiative to your landlord customers, and indeed the impact on their future livelihoods of this unfair tax. The vast majority of UK landlords will be negatively affected. I have pledged £100 towards this case because I think it is the thin end of the wedge, and discriminates against less wealthy people who want to act directly to secure their future retirement income.

The case can be found at this link:
https://www.crowdjustice.co.uk/cases/

It is called Judicial Review of Clause 24, and it titled "Alice in Wonderland Tax Grab"

Please review and consider communication to your customers. Without raising awareness to the 1.8 million UK landlords, it is likely there will be far fewer customers in the next few years.

Extract from the case:

Name of our case:
Judicial Review of Clause 24 of the Finance Act 2015 (“Alice in Wonderland Tax Grab”), which is aimed at disallowing the perfectly legitimate finance costs (including mortgage interest), of individuals who operate buy to let properties in their own name but excludes the same for institutions, corporations, wealthy cash buyers and overseas landlords.

The Clause
The Government not only wishes to continue to tax rental ‘profits’, but will now not allow individual investors to offset the main cost of arriving at that taxable profit, namely the mortgage finance costs.

What’s at stake:
EVERY single business in the UK is allowed to offset their total costs against their income before being taxed (on their profit). 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!

We want to bring back a level playing field in the private rented sector to challenge the advantage the government is giving to institutional and corporate investors, overseas property buyers and cash-purchasing landlords, none of whom are affected by Clause 24.

In the words of Philip Booth, a Professor of Finance, Public Policy and Ethics at St. Mary’s University: “To put it quite bluntly, this is an elementary undergraduate public finance error that should not be made in the Treasury.”

Reply to the comment left by "Gareth Wilson" at "28/12/2015 - 00:20":

As far as I recall it was the double taxation of the same money that Prof Booth described as an elementary... error so it's incorrect to imply that it applies to the wider issues.

Reply to the comment left by "Timid Landlord" at "27/12/2015 - 20:29":

I am not sure that the draft legislation has been publishef yet and I believe there is to be a consultation at some stage.

Direct and indirect Tax discrimination in Tax matters, under EU legislation. I believe we could sucessfuly argue our case under EU legislation:

https://www.meijburg.com/page/non-discrimination-in-tax-matters

Reply to the comment left by "Laura Delow" at "27/12/2015 - 10:58":

And France has one of the most sclerotic property market I can think of. In fact the role of property seems entirely different between the two counries, I seriously considered buying a place there, and property "holding" costs were a concern as was an ongoing annual wealth tax.

French property change hands far less frequently than in the UK largely due to the insane agents costs of up to around 10% on low value properties with somewhere around 5-6 being typical (there is even an agency called "immmobilier 4%" as if that's cheap!) and high Notaire charges. As a result, there is no opportunity for renovation and resale and transction times are extended, a far less dynamic situation than Blighty and one which would make even developes blanche.