THREE months ago members of a housing co-operative in Oxford were celebrating a year together under the same roof.

Now they are facing an unexpected stamp duty bill of nearly £50,000 which they say will bankrupt the co-operative.

The group of six 20 and 30-somethings bought the six-bedroom house in Church Hill Road, East Oxford, in summer 2016 after raising £550,000 from investors and an 'ethical' bank.

They initially paid £34,000 stamp duty when they bought a home in east Oxford one year ago but HM Revenue & Customs is demanding a further £48,500, bringing the total to £82,500 - 15 per cent of the cost of the house.

The Government now classes the co-operative as a 'collective investment scheme'.

Members of Kindling Housing Co-operative believe it is the first time a housing co-operative has been charged under current stamp duty laws and are now seeking legal advice.

Charity worker Rebecca Shadwick, a member of the co-operative, said: "This issue goes beyond this co-op - it makes a tangible, community-led solution to the housing crisis near impossible.

"In this case, it would mean the bankruptcy of the co-operative and the loss of this home for our members."

Protesting alongside charity worker Audrey Versteegen, and teacher Miranda Shaw, Ms Shadwick said the housing co-operative model had been 'miscategorised' by HMRC because no clear laws existed for housing co-ops.

Fellow resident Andy Edwards added: "We spoke with HMRC when planning the business model.

"They directed us to the online calculator, which gave the sum of £34,000, already double what an individual would be charged, which we duly paid."

The members all pay about £477 rent to Kindling Housing Co-operative, which owns the house.

Loans are paid back with up to three per cent interest, guaranteeing a better rate than a savings account for investors but ensuring those living there do not pay as much as a traditional mortgage.

In the year since moving in, the group has extended the kitchen and living room and a bike shed with room for 14 bikes has been installed.

Alex Towler, 33, who works as an architect and a lecturer at Oxford Brookes University, has been living at the house for the past year.

He said: "We are seeking legal advice.

"If the worst comes to the worst the co-operative would be destroyed and we will all be looking for a new home."

Kindling is a ‘fully mutual’ co-operative, a model allowing individuals who would not be able to afford to buy a house to have a stable home.

Kindling raised funds for mortgage with the financial help of community members, and were thus able to get a mortgage through Triodos, an ethical bank based in the Netherlands.

The legal structure of the co-operative means the house can never be sold for private profit, and is not owned by either the members who live in the house, or social investors.

HMRC spokesman Patrick O'Brien said: "We don’t comment on identifiable taxpayers.

"HMRC has an excellent record in supporting those in genuine difficulty, including offering more time to pay if appropriate."