No more Mr. Nice Guy at Britain’s tax office which is shining a stronger spotlight on the activities of landlords.
Letters to 40,000 buy-to-let investors will be sent during the coming four months, obliging the recipients to contact HMRC within 30 days. Failure to do so could result, HMRC says, in a large fine or a criminal investigation.
The tax authority suspects that tens of thousands of landlords are paying little or no tax on rental income and capital gains made on second properties.
Fewer than 500,000 taxpayers are registered with HMRC as owning second properties. The taxman estimates that the true number of landlords could be as many as 1.5 million.
The taxman has been focussing particular attention on landlords over the last three years, and is now tightening up further.
HMRC has traditionally informed itself through the use of the Land Registry and electoral roll, but recently widened its net. In April it sent notices of a number of letting agents asking for details of everyone on the agency books.
They have also begun to monitor social media to see when holiday rentals are advertised to friends and what tax is being declared on that property.
“All rent from letting out a residential property or holiday home has to be declared for income tax purposes,” an HMRC spokesman said. “Telling us is simple and straightforward. The message for all landlords owing tax is simple – it is better to come to us before we come to you.”
It also said hundreds of thousands of visits had been made to its website, Let Property (gov.uk/let-property-campaign).
