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HMRC & Further Targetting of Landlords Not Declaring Rental Income
tbs624
Posts: 10,816 Forumite
Consultation paper published last week - proposals for HMRC to be able to force LAs to hand over details of *all* LLs who use their services. Currently this power applies only where LLs use the LA to receive rent payments & HMRC proposals are that it should also apply in the case of those who use LAs as tenant-finder only services ( this would apply even if the LL used the LA as a on-off & is no longer on their books).
Predictably, ARLA voiced their concerns that this would create more work for LAs - anyone like to hazard a guess on who will get to pay for that?;)
HMRC investigators have apparently already pulled in circa £100m in preiously unpaid tax & are looking for another £200m.
The related press reports also highlight how investigators trawl the classifieds & Land Reg data to track down properties where a LL is failing to declare rental income, and have a whistleblower hotline. Tax evading LLs who don't come forward are likely to find themselves under inquiry, paying penalties & unpaid tax going back for up to 6 years & possibly facing prosecution.
The calls for LL registration schemes are undoubtedly less about protecting Tenants & more about a bit of good old database sharing to further help HMRC gather this information : no doubt the proposals for LA registration will include a legal obligation to report all LL details.
Predictably, ARLA voiced their concerns that this would create more work for LAs - anyone like to hazard a guess on who will get to pay for that?;)
HMRC investigators have apparently already pulled in circa £100m in preiously unpaid tax & are looking for another £200m.
The related press reports also highlight how investigators trawl the classifieds & Land Reg data to track down properties where a LL is failing to declare rental income, and have a whistleblower hotline. Tax evading LLs who don't come forward are likely to find themselves under inquiry, paying penalties & unpaid tax going back for up to 6 years & possibly facing prosecution.
The calls for LL registration schemes are undoubtedly less about protecting Tenants & more about a bit of good old database sharing to further help HMRC gather this information : no doubt the proposals for LA registration will include a legal obligation to report all LL details.
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Comments
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Tax evading LLs who don't come forward are likely to find themselves under inquiry, paying penalties & unpaid tax going back for up to 6 years & possibly facing prosecution.
Good: And, likewise, any other tax cheats ....stone me the country needs the money....
Cheers!
Lodger0 -
Interesting to see that the underlying assumption is that landlords are making enough profits to gain a considerable amount of tax from the non-declaring ones.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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Interesting to see that the underlying assumption is that landlords are making enough profits to gain a considerable amount of tax from the non-declaring ones.
Well if they arent making profits then maybe they are amateurs and should sell their BTL properties.
Too many amateur landlords out there who dont have a clue what they are doing0 -
I have no issue whatsoever with the HMRC fulfilling its role to collect taxes where its due.
However, their fraud hotline leads to the investigation of just a tiny percentage of reports being investigated - no more than 5%, I think.
So why would they bother to proactively trawl through newspaper adverts to try and identify rental properties when they ignore most of the information that's gifted to them?0 -
Any source for the percentage?....However, their fraud hotline leads to the investigation of just a tiny percentage of reports being investigated - no more than 5%, I think.
I should imagine that any hotline will get a good percentage of calls that are based solely on speculation and personal vindictiveness but that there will be cases that are worth their while following up: it's also the deterrent factor. HMRC investigators also do it with childminders' adverts apparently - now *they'll* be the really big earners.....;).So why would they bother to proactively trawl through newspaper adverts to try and identify rental properties when they ignore most of the information that's gifted to them?
I take Silvercar's point but the fact is that if you have no tax to pay you have no reason not to declare your paperwork showing just that: ignorance &/or an aversion to proper records don't pass muster as valid reasons. . The additional issue is that those who fail to comply with HMR regs are often those who don't meet their LL obligations elsewhere either.0 -
Re. the fraud hotline - it does work, at least in my experience.
I had a tenant who was (against my express direction... and with overcrowding..) sub-letting to 4 decent, hardworking eastern-european guys'n-galls. He was making more than the rent - the rent which he was not paying anyway and boasting about how clever he was!.
Dunno how but somehow the taxman found out.. and taxed him. Also finding out were the council, and the council tax people & the housing benefit (oh, yes...) guys... I know this as I am pleased to advise he is now after long chases repaying my rent arrears, with 8% added pa, and the other creditors he is paying off are thereby known to me...
So, grass the crooks up!
Cheers!
Lodger
PS How did I find where he was working so I could "arrest his wages" (Scottish equivalent to English "attachment of earnings")?? He collected my finished-with cup'n-saucer when I was coming round in hospital after an op so I knew what to do next...: that cheered me up at the time!0 -
I take Silvercar's point but the fact is that if you have no tax to pay you have no reason not to declare your paperwork showing just that: ignorance &/or an aversion to proper records don't pass muster as valid reasons. .
Totally agree. In fact, declaring a loss could have tax advantages to some.
I just wonder why the revenue would spend a fortune chasing people to declare their losses. They must have reason to believe that lots of landlords are not declaring profits.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Are you sure he wasn't moonlighting from his real job at the hospital? The operating team did remove the *right* part, didn't they?theartfullodger wrote: »PS How did I find where he was working so I could "arrest his wages" (Scottish equivalent to English "attachment of earnings")?? He collected my finished-with cup'n-saucer when I was coming round in hospital after an op so I knew what to do next...: that cheered me up at the time!
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I have no issue whatsoever with the HMRC fulfilling its role to collect taxes where its due.
However, their fraud hotline leads to the investigation of just a tiny percentage of reports being investigated - no more than 5%, I think.
So why would they bother to proactively trawl through newspaper adverts to try and identify rental properties when they ignore most of the information that's gifted to them?
The fact that HMRC are publicising that they are going after tax evading landlords will get at least some to own up and pay just to avoid being fined.0 -
Tax evading LLs who don't come forward are likely to find themselves under inquiry, paying penalties & unpaid tax going back for up to 6 years & possibly facing prosecution.
Hmmm - that may be what HMRC are saying to get LLs to come forward but any that are coming clean need to be aware that there will be fines and back taxes to pay unless you can prove that you are genuine new LL. HMRC will look back over 6 years once they know you exist unless you negotiate a different deal. That said, I fully support all these moves and it is excellent that they do fine the cheats.The calls for LL registration schemes are undoubtedly less about protecting Tenants & more about a bit of good old database sharing to further help HMRC gather this information : no doubt the proposals for LA registration will include a legal obligation to report all LL details.
I've always thought this.Totally agree. In fact, declaring a loss could have tax advantages to some.
Absolutely there are tax advantages, the second six months of the year is spent playing with my repair schedule figures to make sure that I (legitimately) sustain a small loss.
I don't know why people worry about declaring their losses - the tax return is really not that complicated and I guess that people only have to fill in a few boxes online (I'm not sure how it works online as annoyingly I have to do the paper forms).0
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