With the help of letting agents, the taxman has recovered over £20m in unpaid tax from private landlords.
Last year, hundreds of letting agents were sent statutory notices to provide details of rents collected on behalf of all landlords.
Figures released this week by HMRC show over £20m recovered as at the end of January – massively up from the figure of £7.9m announced in October.
HMRC’s Let Property Campaign is an ongoing crackdown on private landlords with undisclosed rental income.
The campaign provides buy-to-let and other private landlords with an opportunity to make a full and voluntary disclosure on more favourable terms than if they were caught.
It is understood that over 9,500 landlords have so far taken up the opportunity to bring their tax affairs up to date.
Ian Leigh, tax partner at accountancy firm Jefferys Henry LLP, said: “These figures should come as a warning to anyone with undisclosed rental income.
“With increased data-gathering activities, it is less likely a case of if and more likely when HMRC catches up with you.”
HMRC now gathers information from much wider sources beyond local authorities, the Land Registry and electoral roll, and now includes agents.
Leigh said: “Landlords with undisclosed rental income should take this opportunity to come forward and regularise their tax affairs as soon as possible.
“Penalties as low as 20% and affordable payment plans can often be negotiated for those who make a voluntary declaration as part of the Let Property Campaign.”
Landlords who ignore this opportunity face penalties of up to 100% and in certain cases criminal prosecutions.
Earlier this year, two men from London and Essex were arrested as part of an investigation into an alleged Capital Gains Tax and Income Tax fraud.
HMRC claims the pair had failed to declare CGT on a number of properties that they had bought and sold.
Comments (3)
For several years HMRC were collecting this data from my firm… until a few years ago. They just stopped asking for it, have no idea why.
In 2009 HMRC were still working their way through Section 19 reports from 2003 ( that is the report you were sending in) One of the last things I designed at CFP was this reporting function with automatically generated SA105 forms for each landlord that even collated the form across multiple agencies for a single landlord.
The technology has been built, the csv reports written but HMRC are too…… whatever! to accept them and process them. If allowed I could have the system running this afternoon and within 3 months be sending out demands going back 14 years for near on 45% of anyone who has rented out property , even briefly at any in that time. So much money is left uncollected I would guess there is easily enough to wipe out Labour’s debt legacy in a single fiscal year. This is so embarrassingly bad no-one has the fortitude to even contemplate what I am saying!
My advice to CLG inquiry into PRS was to put the landlord’s tax reference on every tenancy agreement. With that done no legitimate landlord (deliberate or accidental/ private or company) could avoid being included on an Agent’s or Landlord’s obligatory return to HMRC.
A standard CSV report automatically submitted by Agent’s SAAS systems would mean by midnight on April 6th HMRC would be aware of the full rental income of every single legitimate tenancy and therefore, by default, highlight all undeclared tenancies.
It is astonishing that HMRC are blowing their own trumpet over these micro successes when they have simply turned their back on collecting their full fair share of an estimated £740,000,000,000 per annum. In the context of a PR press release £20 million is a big number but given that incompetence by HMRC for the 20 years I have been involved with client cash accounting to collect anything like what is owed to them it is simply pathetic loose change! Sorry for the rant but the ineptitude of that one department simply makes my blood boil! Their arrogance at dismissing a solution that requires apolitical, no thought required legislation and a single (granted BIG) excel spreadsheet simply defies belief.