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Hmrc Btl Campaign Targeting £500M Of Evasion

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Anyone know the likely impact of the pending HMRC campaign? They seem to be targeting £500 million of evasion. How did they calculate that?

Let Property Campaign

This campaign will target the residential property letting market and offer a chance for landlords in this sector to get up to date and then remain compliant. Find out more information about paying tax when renting out property or call the Let Property Campaign Hotline between 9.am and 5pm Monday to Friday on 03000 514479.

https://www.gov.uk/government/policies/reducing-tax-evasion-and-avoidance/supporting-pages/hmrc-campaigns

There is one telegraph article

http://www.telegraph.co.uk/finance/personalfinance/investing/10320504/Buy-to-let-Landlords-warned-over-unpaid-tax-on-rental-income.html

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Anyone know the likely impact of the pending HMRC campaign? They seem to be targeting £500 million of evasion. How did they calculate that?

Let Property Campaign

This campaign will target the residential property letting market and offer a chance for landlords in this sector to get up to date and then remain compliant. Find out more information about paying tax when renting out property or call the Let Property Campaign Hotline between 9.am and 5pm Monday to Friday on 03000 514479.

https://www.gov.uk/government/policies/reducing-tax-evasion-and-avoidance/supporting-pages/hmrc-campaigns

There is one telegraph article

http://www.telegraph.co.uk/finance/personalfinance/investing/10320504/Buy-to-let-Landlords-warned-over-unpaid-tax-on-rental-income.html

Deposit Protection Scheme? They have all the information they need including reports from jilted tennants and credit reference qgencies.

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Given that the government have access to most of the information needed to crack down on this type of tax evasion (Land Registry, Valuation Office database, Personal Tax Records, Housing Benefit Claims) you do wonder why it has taken so long to go after this source ofrRevenue

The reason in part is government is a lot less 'joined up' than most people think. For example, HMRC's Valuation Office has historically tried to stand at arms length from the rest of the organisation even running its computer systems on an entirely separate computer network from the rest of the Department. This sort of nonsense is slowly changing as the Treasury are now starting to demand that the VOA actually contribute something to the battle against income tax fraud.

Of course, the other suspicion is that the political will to go after BTL tax evasion has not really existed since so many in political office have friends and family who are in that game.

Edited by stormymonday_2011

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It is good they left it this long - here is why:

There will be 200,000+ landlords based on the £500,000 figure that will have BACKDATED tax + fines, this could force them into liquidating their portfolios and put off other tax avoiding landlords (the majority IMO).

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I think that's a grossly underestimated figure. Suspect there might be billions to be recouped here, but whether they actually do is another thing entirely.

I don't think I've ever rented a place off a landlord that was actually paying taxes properly.

That 5-6% "easy money" yeild suddenly looks a lot less when it's treated as taxable income doesn't it?

How would I report a landlord I suspect has never paid tax on a BTL?

I can think of 2 or 3 off the top of my head that have probably been evading for 15-20 years!

Edited by byron78

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Wonder will the Wail start a campaign to out tax dodging LL's in the same way as they out benefit claimants (scroungers) :huh: don't think so...

Over the years I have asked LL's why they wouldn't let to HB claimants - the most frequent answer was not what I expected, scum, ruin property etc. Nope the answer was that they were worried that the government would know that they were renting property.

:huh:

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Wonder will the Wail start a campaign to out tax dodging LL's in the same way as they out benefit claimants (scroungers) :huh: don't think so...

Over the years I have asked LL's why they wouldn't let to HB claimants - the most frequent answer was not what I expected, scum, ruin property etc. Nope the answer was that they were worried that the government would know that they were renting property.

:huh:

A lot of LL's let to HB tenants these days without realising it. In certain family situations you can be earning a lot of money and still be entitled to a top up of housing benefit. The tenants will otherwise have jobs and good credit references.

I agree a lot of LL's don't pay the correct tax, but I think HMRC have enough data for a substantial crackdown. This is a time bomb, and could very well be our own sub-prime crisis ticking away!

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A lot of LL's let to HB tenants these days without realising it. In certain family situations you can be earning a lot of money and still be entitled to a top up of housing benefit. The tenants will otherwise have jobs and good credit references.

I agree a lot of LL's don't pay the correct tax, but I think HMRC have enough data for a substantial crackdown. This is a time bomb, and could very well be our own sub-prime crisis ticking away!

I forgot that we are different in NI. Stormont decided against tenants receiving HB themselves - it has to go straight to the LL's so they should have enough info from NI HB contributions to start clamping down on tax avoidance. Enough to start the time bomb hopefully.

:)

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I suspect there's something to it. I was speaking to an accountant a few weeks ago and he was saying that the way HMRC work is that they pick a sector and then do a bunch of pilot investigations. If it's successful (ie brings in lots of unpaid tax), they roll it out across the country. He talked about the electrician sector as one. Apparently, many had forgotten to declare the income from selling scrap metal - and so were got for that.

Oddly enough, he also mentioned this very sector as a recent one that had been piloted. Apparently, it had pulled in a lot of old dears letting out cottages, student flats etc who apparently had no idea they should have been paying tax on the income.

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I think that's a grossly underestimated figure. Suspect there might be billions to be recouped here, but whether they actually do is another thing entirely.

I don't think I've ever rented a place off a landlord that was actually paying taxes properly.

That 5-6% "easy money" yeild suddenly looks a lot less when it's treated as taxable income doesn't it?

How would I report a landlord I suspect has never paid tax on a BTL?

I can think of 2 or 3 off the top of my head that have probably been evading for 15-20 years!

There's an online hmrc web form, Google it and fill it in for tax evasion as far back as you like

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Oddly enough, he also mentioned this very sector as a recent one that had been piloted. Apparently, it had pulled in a lot of old dears letting out cottages, student flats etc who apparently had no idea they should have been paying tax on the income.

That's this dead in the water then. Old dears are politically untouchable. Imagine the headlines "HMRC forces pensioners to sell their homes" etc.

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Anyone know the likely impact of the pending HMRC campaign? They seem to be targeting £500 million of evasion. How did they calculate that?

Let Property Campaign

This campaign will target the residential property letting market and offer a chance for landlords in this sector to get up to date and then remain compliant. Find out more information about paying tax when renting out property or call the Let Property Campaign Hotline between 9.am and 5pm Monday to Friday on 03000 514479.

https://www.gov.uk/government/policies/reducing-tax-evasion-and-avoidance/supporting-pages/hmrc-campaigns

There is one telegraph article

http://www.telegraph.co.uk/finance/personalfinance/investing/10320504/Buy-to-let-Landlords-warned-over-unpaid-tax-on-rental-income.html

...why the campaign ..they obviously haven't been doing their jobs.... :rolleyes:

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That's this dead in the water then. Old dears are politically untouchable. Imagine the headlines "HMRC forces pensioners to sell their homes" etc.

..do you really believe they were unaware they should be paying tax on rented property income.....?....remember you have to make up the difference they are avoiding.... :rolleyes:

Edited by South Lorne

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Given that most BTLs are mortgaged to the hilt, most BTL landlords wold likely not have to pay much tax, even if they have failed to declare income. It is the people who own houses outright and have decided to let them, who would have to pay a big chunk of tax, but there are probably not that many of them in the grand scheme of things.

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