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Hmrc Turns Up Heat On Landlords

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Wonder how much manpower they have to truly follow this up? Interesting stat in the article "Fewer than 500,000 taxpayers are registered with HMRC as owning second properties. The taxman estimates that the true number of landlords is much higher, at around 1.5 million, and wants to close the gap."

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Surely this would be easy to solve. A national register of residential landlords/ rental properties. Rent a property without registration? Tenancy agreement null and void, tenant becomes sitting tenant.

Too much expensive bureaucracy? Got to cost less than 1 million untaxed LLs + a load of HMRC inspectors to chase them all up.

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One of the easiest ways to crack down on landlord tax fraud would be to make housing benefit payable in the form of a voucher that can only be redeemed in monetary term from the government. The first requirement for getting your money would be that you had registered and declared your income as a landlord to HMRC.

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Wonder how much manpower they have to truly follow this up? Interesting stat in the article "Fewer than 500,000 taxpayers are registered with HMRC as owning second properties. The taxman estimates that the true number of landlords is much higher, at around 1.5 million, and wants to close the gap."

My guess is a lot of it will be automated and speculative. My accountant was also telling me that HMRC do a cost benefit analysis in their initial discovery phases before targeting a new area proper. They'll likely be going after the easy stuff. The easiest thing to do is to scare the horses, and see people voluntary give up.

The example he gave me was on plumbers who were making a bit on the side from selling scrap copper piping. They'd do a quick trawl of plumbers accounts looking for income from this source. If they didn't find any, they'd make a quick calculation based on what other plumbers were making, and simply ask why it was missing. If you couldn't give a good explanation, they'd assume the worst and ask for multiple years worth of unpaid tax on that income/poss flag for more detailed investigation.

Sometimes I wonder which is worse; PAYE, or trying to navigate a labyrinthine tax system as self employed.

Edited by StainlessSteelCat

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Surely this would be easy to solve. A national register of residential landlords/ rental properties. Rent a property without registration? Tenancy agreement null and void, tenant becomes sitting tenant.

Too much expensive bureaucracy? Got to cost less than 1 million untaxed LLs + a load of HMRC inspectors to chase them all up.

They have a landlord register in Ireland and if your landlord is registered abroad then it's the tennants responsability to withhold 20% of the rent to pay as tax.

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One of the easiest ways to crack down on landlord tax fraud would be to make housing benefit payable in the form of a voucher that can only be redeemed in monetary term from the government. The first requirement for getting your money would be that you had registered and declared your income as a landlord to HMRC.

If housing benefit was paid in the form of a voucher, ALOT less landlords would take tenants on housing benefit. It's already a big enough problem as it is. There are vast numbers of people out there claiming housing benefit without their landlords knowledge and there's always been rampant discrimination against DSS tenants so exxpect that to increase if their claims are made known.

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They have a landlord register in Ireland and if your landlord is registered abroad then it's the tennants responsability to withhold 20% of the rent to pay as tax.

Not sure I agree with using tenants as tax collectors. Are they paid for the time, effort and responsibility?

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Surely they should be going after the ones who are not registered.

All that backdated money to waste on vanity projects.

You don't have to register second properties with HMRC. So I have no idea what the article means.

You only need to declare income, or capital gains, not the existence of 2nd properties.

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How often do we get this press release from HMRC? It's a joke. The more they do this, the less I think they actually investigate. Wizard of Oz springs to mind.

As a department they are still cutting staffing levels so I would imagine the chances of any individual landlord getting caught are small. It really rather depends how good their IT systems are at joining up the dots. Historically data was held in discrete silos but I so cross referencing was difficult but I think HMRC are planning to invest in 'Big Data' Analytics in a major way so that may be about to change

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'Big Data' will just lead to Bigger Mistakes ime, HMRC are a total shower - they once sent me 4 tax codings on the same day, all were wrong. Big IT systems will just mean that I get 400 wrong ones instead.

Some years ago some Inland Revenue compliance department started to ask me/my company for an annual breakdown of money spent with each supplier. As I operated a manual accounts system it wasn't a case of pushing a button and printing it out, it took me over a day to do. I explained on the phone the effort required but they insisted and sent me the same request each year. Finally, after three years of me bellyaching to them over the phone, the requests stopped coming.

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How often do we get this press release from HMRC? It's a joke. The more they do this, the less I think they actually investigate. Wizard of Oz springs to mind.

It used to be an annual shakedown but the last scare was about 2 weeks ago.

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'Big Data' will just lead to Bigger Mistakes ime, HMRC are a total shower - they once sent me 4 tax codings on the same day, all were wrong. Big IT systems will just mean that I get 400 wrong ones instead.

Well there is quite a bit in the IT and Accountancy press on this subject.

https://www.accountancylive.com/hmrc-investigations-how-connect-uses-big-data

HMRC obviously think this is where the future of tax investigation lies rather than pouring over mounds of petty cash vouchers and expenses claims which is what used to happen.

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You don't have to register second properties with HMRC. So I have no idea what the article means.

You only need to declare income, or capital gains, not the existence of 2nd properties.

You mean you just need to declare the loss you are making. :)

All of these people avoiding tax on one or two properties by not declaring could avoid all the risk by hiring an accountant who would ensure that they pay zero or the bare minimum tax. There's very little profit in small BTL empires.

I do wonder if the tax is waiting to get to the point where they just issue the fines to those with BTL who haven't declared.

What are the fines for not declaring?

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Would it not be simpler if the tenant withheld basic rate tax on the rent and the tenant paid it over to the revenue, similar to the construction industry rules

Landlord (to tenant): You can either pay me £800 and Inland Revenue £200 a month or you can pay me £850 and we both keep our mouths shut.

Tenant (to landlord): I'll take option b.

Landlord (to tenant): Okay, sign this bit of paper that says you'll make the payments to Inland Revenue, don't worry it's just a formality.

5 years later

Taxman (to tenant): Where's my £12k plus interest and penalties?

Edited by Dorkins

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If housing benefit was paid in the form of a voucher, ALOT less landlords would take tenants on housing benefit. It's already a big enough problem as it is. There are vast numbers of people out there claiming housing benefit without their landlords knowledge and there's always been rampant discrimination against DSS tenants so exxpect that to increase if their claims are made known.

Nice little thought for any landlord with income to hide.

Peoples circumstances change. When might your tenant (in good standing) put in a claim for housing benefit?

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Guest Jemmy Button

Remember that song by Spitting image "I've never met a nice South African"? Well, I've never met a nice landlord, yet. I view them all as being like deep south slave owners whipping their slaves (tenants) on to give them more profit. I despise private landlords...

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Remember that song by Spitting image "I've never met a nice South African"? Well, I've never met a nice landlord, yet. I view them all as being like deep south slave owners whipping their slaves (tenants) on to give them more profit. I despise private landlords...

You can stay :D

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Remember that song by Spitting image "I've never met a nice South African"? Well, I've never met a nice landlord, yet. I view them all as being like deep south slave owners whipping their slaves (tenants) on to give them more profit. I despise private landlords...

I'm going to guess at

"..and that's not bloody surprising man,

because we're a bunch of ignorant b@stards

that smell like baboons"

And now off to youtube to see how memory serves.

Welcome to the forum.

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I will let you into a secret, all EPCs are registered as marketed sale not a marketed sale, rental private or social. This is hidden info, but is put into the data. the Gov know what properties are being rented.

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Not sure I agree with using tenants as tax collectors. Are they paid for the time, effort and responsibility?

As a tenant it is already your responsibility to deduct the tax, if your landlord is not a UK resident. So the president is already set.

More details about the exceptions of Non-resident landlords can be found here:

http://www.hmrc.gov.uk/international/nr-landlords.htm

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As a tenant it is already your responsibility to deduct the tax, if your landlord is not a UK resident. So the president is already set.

More details about the exceptions of Non-resident landlords can be found here:

http://www.hmrc.gov.uk/international/nr-landlords.htm

Same system as Ireland then in that respect. As a tenant i'm never sure how you are supposed to know where the landlord really lives, but I guess if it ever got to the investigation stage you would produce a tenancy agreement with the landlords registered address.

I will let you into a secret, all EPCs are registered as marketed sale not a marketed sale, rental private or social. This is hidden info, but is put into the data. the Gov know what properties are being rented.

Very interesting info that as all you would have to do is cross check the address with the land registry and you have a list of properties that are being rented and the registered owners address all bar a few accidental landlords.

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