HMRC continues crackdown on tax-avoiding landlords
Published by Daniel Jones
Landlords in the UK have been given a reminder that they must pay tax on any homes they rent out to tenants.
A report by the Daily Telegraph has suggested fewer than 500,000 landlords are registered with HMRC and pay tax on any home other than their own. But some sources indicate the true number of landlords in the country is somewhere between 1.2 million and 1.4 million.
While there is no definite answer for this discrepancy, the taxman is said to have decided it is time to clamp down on those who break the rules. Every landlord should pay tax on their incomes and gains from homes they rent out.
Accountants have told the news source that the matter is "getting serious" right now, after two years of initial campaigning to get landlords to come forward and declare their properties. HMRC has been keen to point out the potential punishments associated with failing to reveal a home is being rented out.
Mark Giddens, head of private client services at accountancy firm UHY Hacker Young, said: "HMRC typically announces its campaigns and task forces and gives people an opportunity to come clean. After that it acts."
He suggested the body is now likely to be close to breaking point, at which stage it will move on to the next stage of its crackdown and begin to punish those it discovers are failing to pay tax on rental income severely.
It is not only HMRC's significant interest in recovering lost taxes that is fuelling the drive, it is also the fact that a number of accidental landlords have been created in recent years as a result of the economic crisis and many may not know they should be paying tax.
Simon Whittaker of landlord mortgage broker Mortgages For Business thinks there are property owners who had to keep hold of their homes when the market crashed but are now looking to sell, so any buyers will have to plan around the tax.
Published on: October 30, 2013
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