The government's attitude to RSLs and stamp duty is bizarre.
Wouldn't it be odd if the government, at the same time it pushed ahead with plans to exempt commercial property speculators from paying stamp duty, was hammering registered social landlords and their tenants for stamp duty on periodic tenancy agreements?

Well, that is precisely what is happening. In a confusion of priorities that makes the whole scene reminiscent of Alice in Wonderland, the Inland Revenue has refused to alter its policy of insisting that stamp duty is paid on the provision of social housing, while at the same time as Treasury ministers plan to cut costs for people hoping to make a profit from direct investment in commercial property. The irony is completed when you realise the definition of commercial property includes residential buy-to-let property.

Continuing the theme of believing six impossible things before breakfast, the reason the issue has arisen for RSLs within the past few months is the reversal of a Bar Council ruling (apparently under pressure from the Treasury) that prohibited the taking of stamping points in possession cases. This caused the rule preventing unstamped documents being used in civil proceedings set out in the 1891 Stamp Act to fall into abeyance.

The revocation of the Bar Council ruling and the publicity given to it has led to a gradual realisation among tenant lawyers that this was a good way to enable their clients to defend possession proceedings. This led to some courts adjourning cases and, most recently, a direction being given by the deputy head of civil justice in England and Wales that all courts should adjourn or dismiss possession cases based on tenancy agreements which have not been stamped.

Whether the government or the tenants' representatives have thought about the implications of this policy on tenants' disrepair cases remains to be seen.

The Inland Revenue should be compelled to alter its policy by a legal challenge

There is also a strong economic case against this policy. The terms under which RSLs enter into local government homelessness contracts require possession actions to be brought in most cases. This means that stamp duty will more often have to be paid. Some of the larger associations who do the bulk of this poorly remunerated but socially vital work have said they would consider not renewing their contracts if they had to pay the duty. When it was pointed out to Inland Revenue officials that the cost to the taxpayer of housing a homeless person in private sector bed-and-breakfast accommodation is £37,000 a year compared with £12,000 a year where the accommodation is provided by RSLs, their reaction was to shrug and say that the money came from a different budget. So much for joined-up thinking.

For the past six months or so, National Housing Federation policy officer Bob Wilson and I have been meeting with the Inland Revenue and discussing these arguments. We have pointed out, to no avail, the inconsistency of RSLs benefiting from the charitable exemption for leases granted to them but being denied it for leases granted by them.

We have also had lengthy discussions with Inland Revenue lawyers about the legal foundation for their position. The NHF recently circulated a letter to me from the Inland Revenue on this issue. The position the Inland Revenue takes is that a tenancy expressed to be "weekly" or "monthly" (which most RSLs use) will usually be stampable, subject to rent limits. It has conceded, however, that a tenancy described to be "for a week and thereafter weekly" or "for a month and thereafter monthly" will, in most cases, not be stampable. As a matter of property law there is no difference. This distinction is artificial and absurd.