A court date has been set for a legal challenge to tax changes set to hit landlords from April next year.
Cherie Booth QC is leading a judicial review into the new law, which removes landlords’ ability to deduct their mortgage interest costs from their rental income before calculating their tax bill.
The law, which was announced in last summer’s Budget, will be gradually phased in from next year.
Landlords will be able to claim an allowance, but it will be limited to 20pc – meaning higher and additional-rate taxpaying landlords will end up paying tax on their turnover, not their profit.
Basic-rate taxpayers could be pushed into higher tax brackets without earning any extra income.
The case will now be heard on October 6 at the Royal Courts of Justice in London.
It was originally meant to be heard in September, but campaign group Axe the Tenant Tax, which is behind the campaign, said that it was made later because HMRC asked for more time to prepare.
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The hearing will be a “permission hearing”, at which the group will set out its argument for bringing a judicial review.
The hearing is expected to take about 90 minutes, during which a judge will decide whether or not the group is allowed to bring a judicial review to challenge the law.
Landlords Steve Bolton and Chris Cooper are behind the campaign, which has raised more than £100,000 to fund the challenge.
The campaigners say they are concerned that the tax will push rents up and force many landlords to sell.
The case will partly be based on the argument that the new law goes against a “principle of taxation” that businesses are allowed to deduct their expenses before paying tax.