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Landlords and tax on rental income


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8 hours ago, Gribble said:

It is clear form this and other boards (TMF) that a large proportion of Asians are tax evaders (thieves). No excuse with culture; if they cant abide by British values they need ot be sent back to their country of origin

I've mentioned it before on here but an Asian friend I went to school with had a massive house with a big family living in it. They bought their gran over from India and got her a 2 bed council flat.. (many years ago) then the entire family moved into the flat, small roll beds all over the front room. Rented out the owned house.. recon they are millionaires by now.. .. life really is unjust..

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7 hours ago, Mrs Bear said:

But how many ever get caught?  You hear of so many cases - it would seem that most are blithely confident of getting away with it long term.  If LLs were commonly caught out it would surely get around and put the frighteners on the non payers. Or at least some of them.

I don't suppose anything much would scare off the criminal/semi criminal slumlords who cram them in and demand cash in hand rent - except maybe massive fines and confiscation of their properties.  Or at least, the massive fines + being banned from renting properties ever again.  

Is there any reason that a punter couldn't put a Freedom of Information request in with HMRC to find out how many people they made demands on in the last tax year, for example?

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1 hour ago, Lavalas said:

I've learnt a lot from reading BTL forums this past couple of years. It's always interesting to hear about all the various tax avoidance schemes and different approaches to S24 that some of them will be taking. A few of those landlords sure do like to talk...

;)

Ive not.

Just how fcking dumb + innumerate a large part of the UK population is.

 

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2 hours ago, Gush said:

:lol:

I hear from work colleagues discussing ways of avoiding it and boasting how clever they are. I dont know all of their individual positions, but its very obvious that they have left loads of trail  for HMRC to follow up, also most of them are digital and easy to get access. 

In any given area a minority of high leverage BTLers-  the most easy target, getting caught would be sufficient to bring down the paper value of many other disguised LLs.

 

Buying a house puts your name on the land registry FFS.

If you take out a mortgage you cannot take it out in your dogs name.

 

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7 hours ago, Drummer said:

Most landlords dont fill in tax returns and are confident they wont get caught. Tbf, I'm confident they wont get caught either which is frustrating from an equality point of view. A teacher who has never done a self assessment in their life isnt going to start filling one in just because they have a BTL or two.

There are also those who complete tax returns but take mick with allowable expenses.

Thus, S24 is of little relevance for them.

Ignorance is bliss, until the fixed term on your mortgage expires, it resets to the SVR, doubling your mortgage interest expense just as your ability to deduct it is withdrawn.

Quote

Now landlords are being warned that they must make sure their tax affairs are in order as any discrepancy between the income they declare to HMRC and that they declare to their mortgage lender is likely to be spotted as part of the tougher affordability checks that are coming into force.

Mortgages for Business managing director David Whittaker says: “From 1 October 2017, lenders will be required to look much more closely at ‘true’ income data for landlords owning four properties or more. This will probably mean looking back at the tax returns for 2014/15 and 2015/16, the latter of which have yet, in many instances, to be filed. We all have until 31 January 2017.

“Traditionally, lenders – and thereby brokers – have shown little, if any, curiosity about stated rental income matching up to a high degree with what is declared to HMRC. Those days have effectively gone and thinking about educating landlords, lenders and brokers on what ‘acceptable’ may look like come next October should be happening now, not in 2017.

“It may just be coincidence that, on 21 September this year, HMRC indefinitely extended its Let Property Campaign, the tax amnesty for landlords. But fluke or not, it is surely a sign that the ongoing scrutiny of the buy-to-let sector will continue unabated for the foreseeable future.”

Source: Landlords and brokers face headache as tax changes bite, Mortgage Strategy, 24 October 2016 

Edited by Bland Unsight
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2 hours ago, iamnumerate said:

Sorry I should have said that they are all happy and relaxed about these changes - I am not sure if they are stupid or have made careful calculations and think they are going to be ok.

There was one very funny HPC post that sticks in my mind - can't quite recall it enough to pull up here -  in reply to a flow of BTLers comments of an MSM article, bragging that they won't personally be affected (but still furious about Section 24).

To that, and others, there have been any interesting posts from other HPCers to as how all the math involved can take BTLer (with a few properties) from relaxed/not-really affected, to deeply affected.. LTV shoot-up.  Not affected as things look now, but very much affected with just a tilt in the market.

Due to S24 and any downward valuations / pressure on rents.  Small shifts can change so much.   The calculations and risk profile different for each BTLer.   And some believe that BTL lenders are likely to be less forgiving in time ahead, with margin calls, to BTLers who are in a struggle.  And from there the possibility of even more positions being found out, as BTLer after BTLer stumbles.  All about holding onto a leveraged position as market turns, and everything that follows on including sentiment change.

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On 11/25/2016 at 1:01 PM, Phil321 said:

I think the first point here is really interesting too. I bet there are some people do not do a return knowing they make little or no profit. Of course that is wrong but in the scheme of things....probably happens. 

C24 takes this away - even for BR tax payers - because effectively the profit (before interest) needs to be declared in order to determine underlying income tax rates etc. And no one can say that they worked that out in their head....it's a declaration of earnings not a declaration of profit  

HMRC may not have been too bothered in the past this changes the reason for the tax return. Ie not to calculate necessarily tax due but to record actual incomes.

Mir maybe that person is unaffected in terms of tax - but having to do a return shifts the goalposts. (To where they already were....but shifts it for those who felt they could get away with easy life no tax returns pre C24). 

 

On 11/25/2016 at 1:52 PM, Confusion of VIs said:

That raises an interesting point.

I know a couple of people with BTL's, held in the non working partners name, that have never submitted a return because profits their profits were below the tax threshold. Going forward they will be liable for tax, I wonder how HMRC will react if they now start submitting a tax return.

I imagine it could prompt a tax investigation to confirm there really is no back tax to pay.  Not a pleasant experience even if they have kept all the paperwork and can demonstrate no tax has been evaded.  

Not kept the paper work, oh dear that will get tricky; and expensive when HMRC's fantasy tax demand appears. 

S24 changes everything for the BTLers/LLs on taxation.

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I admire the faith (hope?) that the people have on this thread for:

1) The landlord being an upstanding citizen and declaring the correct tax owed; and

2) HMRC being a well-oiled machine (like public sector bodies are known for) and doing their job properly.

I think the confidence certain HPCers have in landlords and HMRC is misplaced, but time will tell.

Edited by Drummer
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27 minutes ago, Drummer said:

I admire the faith (hope?) that the people have on this thread for:

1) The landlord being an upstanding citizen and declaring the correct tax owed; and

2) HMRC being a well-oiled machine (like public sector bodies are known for) and doing their job properly.

I think the confidence certain HPCers have in landlords and HMRC is misplaced, but time will tell.

If Section 24 just a joke for you, and if you see HMRC as always turning a blind eye, another reason for HPI buy buy buy.  :)

It's my main position as one of those certain HPCers you 'admire' (perhaps in same way the BTLers and HPIers 'admire'.... with utter contempt?) - we're each market participants, and renters don't exist to bail out BTLers or homeowners (BOMADs) for their market choices, which price out those renters.  Market.

6 hours ago, Drummer said:

What have i said that is wrong? I meant that s24 means little to most landlords because they dont declare rental income...which most dont!

Yes, HMRC can look up mortgages etc. but the evidence suggests they dont due to resources or whatever.

This is why s24 works in thoery but not in practice!

It's only just about to come in (S24).

The landlords may get little choice but to fill in a return, perhaps from direct request/demand.   I've seen examples of HMRC organisation and was impressed.

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31 minutes ago, Drummer said:

I admire the faith (hope?) that the people have on this thread for:

1) The landlord being an upstanding citizen and declaring the correct tax owed; and

2) HMRC being a well-oiled machine (like public sector bodies are known for) and doing their job properly.

I think the confidence certain HPCers have in landlords and HMRC is misplaced, but time will tell.

If HMRC is so useless and landlords so delinquent, why have so many landlords built face-washing portfolios? Why bother when you can just cheat?

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Inland revenue already have a lot of tools to cross verify income, mortgages etc. 

In 2011 - 'The Mortgage Verification Scheme, which comes into force from today, means that lenders can choose to pass on applicants’ details to HMRC for additional checking. If they don’t match what is written on their tax returns, they could face an investigation.

A spokesman for the Council of Mortgage Lenders, which is setting up the scheme with the Building Societies Association and HMRC, said that the scheme will “help HMRC to risk assess whether the information it has been given on applicants’ tax affairs is correct”.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8732253/HMRC-to-verify-mortgage-applications.html

HMRC's impressive new software trawls billions of items of data from dozens of sources in its hunt for underpaid tax – and it's about to have access to even more information, which can be shared with 60 other countries

The software, called "Connect", has been developed at a cost of £80m over seven years. Its basic job is to scour vast databanks of personal and commercial information, seeking to unearth links between individual taxpayers and businesses, income, assets and transactions.

http://www.telegraph.co.uk/finance/personalfinance/tax/11697816/What-does-the-taxman-know-about-you-your-finances-and-your-lifestyle.html

HMRC has not yet – according to a number of accountants representing large landlords – made blanket demands of estate agencies to provide lists of clients and the rents paid to them.

But this would be within its powers under "Schedule 36", wide-ranging legislation which gives the taxman power to force third parties to disclose data where it believes there is a lot of "underreporting" of tax.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10835936/Why-doesnt-the-taxman-ask-buy-to-let-investors-to-provide-their-property-details.html

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11 hours ago, ebull said:

I've often thought that this is exactly the type of activity that should be privatised or offered to joe public on a reward basis.

HMRC are just not set up to dig into these details. Publish the tax return of anyone renting out property [job for deposit protection folk, they do sod all else to collect their dosh]. Then offer joe public 10% of any unpaid tax collected from the errant landlord.

Suspect that would get a few votes not only on here but also in general.

I've said before on here that I would more than happily take a commission only role at HMRC, flushing out non payers of tax on rental income. I'd be extremely motivated at work and have no problems hitting any targets.  Venger for Team Leader :D 

 

10 hours ago, Bruce Banner said:

HMRC are in no hurry as they can go back 20 years and charge penalties and interest. 

Yes and they do. Amateur BTL'er at work got a surprise from HMRC, after letting a flat out 6 years previously. 

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4 hours ago, sideysid said:

I agree to all the replies on IO BTL mortgages. Thats all well and good for the stupid t**t on 30k thats over leveraged themselves or those with lots of properties.

What I want to know is whats in place for chasing up residential mortgages disguised as residential which I suspect a lot of the London housing bubble consists of?

Quite. I know several people renting out homes they have either on residential mortgages, or no mortgages. No agents - they take rent cash in hand, and the deposit isn't in a scheme. No tax returns, they are in PAYE employment.

There are probably hundreds of thousands like this.

 

Edited by mrtickle
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My 2 cents,

HMRC never investigated a LL up until now as the cost of investigation exceeds the return from the LL, as most may be offsetting thier income against the MIR. Now they have a merit to investigate any anomaly they detect from the various sources of information (deposit schemes and other sources).

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47 minutes ago, lastlaugh said:

If HMRC is so useless and landlords so delinquent, why have so many landlords built face-washing portfolios? Why bother when you can just cheat?

I accept that there are landlords who want all their tax affairs in order; its just from my experience of meeting BTLers and LLs, they mostly fall into either:

  1.  Cash in hand, no tax return
  2. Let via letting agent and no tax return
  3. Via letting agent, fill in a tax return but bodge it so they pay nil or circa nil tax. That new bathroom installed in main residence? Just stick it on expenses innit

These landlords don't give two hoots about section 24 because tax isn't on their radar/agenda. Those who are affected by s24 (LLs who fill in a tax return and are generally honest about their position) can sell to a market who are unaffected, in practice, by the tax changes. The remaining landlords will bid up against each other because they are unaffected by s24 and therefore the yield remains the same for them.

 

Venger - pleasing to read you have seen HMRC in action, getting their shit together.

Edited by Drummer
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28 minutes ago, Starla said:

I've said before on here that I would more than happily take a commission only role at HMRC, flushing out non payers of tax on rental income. I'd be extremely motivated at work and have no problems hitting any targets.  Venger for Team Leader :D 

 

Yes and they do. Amateur BTL'er at work got a surprise from HMRC, after letting a flat out 6 years previously

Hehe, with you about motivation.  :lol:

I took notice of the fact the guy HM Treasury picked to coordinate information to the BTLers (after announcement of Section 24) was a younger guy, doing his qualifications toward ACA.  

The tilt in motivation from young to tackle the BTLers, from position of power or influence, must be growing - and then there is the need for the taxation revenue, and possible gains of volume fresh lending when more houses come to market, for a sociatelly better balanced future.

It is clear that both the BTLers (most up until recently, but now increasing concern.... never knowing if it's their turn next, from a position where they never expected to be challenged as multi property core voters), and many a HPCer, has a dim view about power of HMRC.  For me they are the real power of the land.

On 2/24/2013 at 0:49 PM, Venger said:
Quote

Job vacancies and information about working at UKAR.

They look younger sorts to me even from the banner in UKAR's job page for collections officers.

And they look to be having a good time.

Hopefully in that pic they've just whacked arrears on to another reckless BTL debtor with huge mortgage.

KPFybdg0.jpg

 

 

Isn't connect/HMRC now hooked up to the Land Registry?  Cuts and reorganistion, (and need), over recent years (Osborne?) was once claimed to have broken down the barriers and interdepartmental rivalries (for access of information).  Connect.

I refuse to believe in a projection of 100Ks of landlords getting away with it, or that HMRC doesn't know about most BTLers etc etc.   And S24 changes everything from the past anyway.  Soon we will find out.

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56 minutes ago, Starla said:

I've said before on here that I would more than happily take a commission only role at HMRC, flushing out non payers of tax on rental income. I'd be extremely motivated at work and have no problems hitting any targets.  Venger for Team Leader :D 

 

Yes and they do. Amateur BTL'er at work got a surprise from HMRC, after letting a flat out 6 years previously. 

:D That's heart-warming news. what happened next?

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1 hour ago, Venger said:

If Section 24 just a joke for you, and if you see HMRC as always turning a blind eye, another reason for HPI buy buy buy.  :)

It's my main position as one of those certain HPCers you 'admire' (perhaps in same way the BTLers and HPIers 'admire'.... with utter contempt?) - we're each market participants, and renters don't exist to bail out BTLers or homeowners (BOMADs) for their market choices, which price out those renters.  Market.

It's only just about to come in (S24).

The landlords may get little choice but to fill in a return, perhaps from direct request/demand.   I've seen examples of HMRC organisation and was impressed.

Been in business 26 years had numerous dealings with the tax authorities and across all departments PAYE, VAT and tax in general. From the outset found them fair if you weren't greedy. Noticed that standard inspection visits have stopped completely. 

Of course always had to give them a bone on inspections 'sorry guv forgot to declare that fuel card etc' they made a quick calculation and all square everyone happy.

What changed ? My reading is two things

1. Real businesses. Not BTL or sole traders generally have their s*** in order. VAT paid properly, Payroll these days very checkable, to get decent credit you have to have proper accounts which when showing a profit is taxable. Therefore even with a true 'mistake'the amount you get back often isn't worth the effort and getting it out of a business even a small one is quite complex.

2. BTL became its own worst enemy. Large area that when numbers crunched through increasingly sophisticated systems seems to be very much an under performer in the tax collection stakes. In addition you have an asset often not shielded within a business, PAYE citizens galore not declaring income and a political climate rapidly turning against this sector

whats not to like? 

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8 hours ago, Drummer said:

What have i said that is wrong? I meant that s24 means little to most landlords because they dont declare rental income...which most dont!

Yes, HMRC can look up mortgages etc. but the evidence suggests they dont due to resources or whatever.

This is why s24 works in thoery but not in practice!

The resources problem is well on its way to being resolved by the increasing use of connect and automation. 

I think you will find internally they are gearing up for a data led approach focusing on individuals and their ever so visible asset. 

It may mean little to most landlords but they will find out shortly it means a lot to HMRC

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43 minutes ago, Drummer said:

I accept that there are landlords who want all their tax affairs in order; its just from my experience of meeting BTLers and LLs, they mostly fall into either:

  1.  Cash in hand, no tax return
  2. Let via letting agent and no tax return
  3. Via letting agent, fill in a tax return but bodge it so they pay nil or circa nil tax. That new bathroom installed in main residence? Just stick it on expenses innit

These landlords don't give two hoots about section 24 because tax isn't on their radar/agenda. Those who are affected by s24 (LLs who fill in a tax return and are generally honest about their position) can sell to a market who are unaffected, in practice, by the tax changes. The remaining landlords will bid up against each other because they are unaffected by s24 and therefore the yield remains the same for them.

If you don't think S24 will make a difference, then your position must be that the tax treatment of BTL was never a causal factor of HPI.  Landlords were simply riding a wave, and their collective actions had no influence on that wave.  Fair enough, but it seems like a version of the "it's different this time".

I'm taking the opposite position.  I think the tax incentives at the heart of BTL are the necassary and sufficient cause of HPI since 2000.  I think S24 will unwind most of those gains.

Time will tell. Let the games commence!

 

 

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10 hours ago, Drummer said:

Most landlords dont fill in tax returns and are confident they wont get caught. Tbf, I'm confident they wont get caught either which is frustrating from an equality point of view. A teacher who has never done a self assessment in their life isnt going to start filling one in just because they have a BTL or two.

There are also those who complete tax returns but take mick with allowable expenses.

Thus, S24 is of little relevance for them.

 

Which works until you get checked after ten years and you end up owing a shedload.Seen it happen a number of times.Number one cause of bankruptcy is the VAT/HMRC.

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18 minutes ago, Greg Bowman said:

The resources problem is well on its way to being resolved by the increasing use of connect and automation. 

I think you will find internally they are gearing up for a data led approach focusing on individuals and their ever so visible asset. 

It may mean little to most landlords but they will find out shortly it means a lot to HMRC

 

25 minutes ago, Greg Bowman said:

Been in business 26 years had numerous dealings with the tax authorities and across all departments PAYE, VAT and tax in general. From the outset found them fair if you weren't greedy. Noticed that standard inspection visits have stopped completely. 

Of course always had to give them a bone on inspections 'sorry guv forgot to declare that fuel card etc' they made a quick calculation and all square everyone happy.

What changed ? My reading is two things

1. Real businesses. Not BTL or sole traders generally have their s*** in order. VAT paid properly, Payroll these days very checkable, to get decent credit you have to have proper accounts which when showing a profit is taxable. Therefore even with a true 'mistake'the amount you get back often isn't worth the effort and getting it out of a business even a small one is quite complex.

2. BTL became its own worst enemy. Large area that when numbers crunched through increasingly sophisticated systems seems to be very much an under performer in the tax collection stakes. In addition you have an asset often not shielded within a business, PAYE citizens galore not declaring income and a political climate rapidly turning against this sector

whats not to like? 

Eloquently put.

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19 minutes ago, Greg Bowman said:

Been in business 26 years had numerous dealings with the tax authorities and across all departments PAYE, VAT and tax in general. From the outset found them fair if you weren't greedy. Noticed that standard inspection visits have stopped completely. 

Of course always had to give them a bone on inspections 'sorry guv forgot to declare that fuel card etc' they made a quick calculation and all square everyone happy.

What changed ? My reading is two things..................

A good read.  On some matters we have clashed lightly (but that's what a forum is about and good for finding out the truth/reality of some matters), but overall I get very good value from so many of your posts..

As HPCers we've have looked into this before (as SECTION 24 comes into play.)

Point a few people are missing is... everything changes under SECTION 24. :)

The past is the past.   Now many a BTLer/LL have positions to set out to HMRC, or perhaps for HMRC to contact them about.  Connect.

On 5/26/2015 at 1:22 PM, Greg Bowman said:

Personally I think with big data the headline is for the masses, this is already happening. they will start to close down BTL untaxed earnings as said on here before too easy a target. Immovable, illiquid easily identifiable asset owned by the middle class - easy meat.

 

On 5/26/2015 at 1:24 PM, Greg Bowman said:

The HMRC big data project is widely recognised as one of the most successful large scale IT projects of the last 20 years. They have enough laws now they have the data.

 

On 1/10/2015 at 9:47 PM, Wurzel Of Highbridge said:

Well it just goes to show the unwritten rules of the UK landlordism.

Form planning, to laws and tax collection.

 

On 7/26/2015 at 11:32 AM, spyguy said:

Yes. If you're scamming - not declaring, claiming for stuff - it over a number of years, the tax avoided will exceed 4k.

They'll want that back plus interest.

Some of the smaller stuff is done as a means of training up junior revenue employees.

Think to the Jurassic World film, where a T rex bites a blokes leg and then lets her T-rex babies hunt + tear him to bits.

 

On 7/27/2015 at 10:57 AM, spyguy said:

If they have a mortgage - easy. HMRC will be getting the mortgage info directly from the banks.

If they've paid buy cash - also easy. Just consolidate the LR info.

Seriously, if you want to hide a income from a tax authority, its not a good idea to buy a house in the same country.

 

On 7/27/2015 at 8:44 PM, dgul said:

An interesting part of the new tax rules for mortgages is that it will make it 'more difficult' for landlords to get away with under paying tax - at the moment you don't have to fill in a tax return if your additional income is under £2500. There is a 'you must contact your tax office' if you have extra income under £2500 but it is clear that you don't have to fill in a tax return (the important bit). But under the new rules you can't deduct interest from your rental income so just about all landlords will have to fill in a tax return - and if they don't that in itself is an offence punishable through fines, etc.

So - all landlords must fill in a tax return (from 2017).

In that tax return they'll have to declare their income and costs from letting.

The HMRC will be able to work out what the tax position should have been for previous years.

 

On 7/27/2015 at 9:45 PM, fru-gal said:

But if they don't declare it now, they won't declare it then, hell, most of them probably won't even know there has been any kind of change. It all depends on HMRC's desire to find all these underpaying/non-paying landlords. I'm not convinced that HMRC has the manpower or technology to find all these tax cheats. It's like the mythical BBC tv detector vans imo, HMRC relies on scaring mostly honest people into paying more tax than rooting out those that have never/don't pay tax.

:mellow:

On 7/27/2015 at 10:07 PM, dgul said:

But at the moment they can't assume that a person who might be a landlord has to fill in a tax return. In the future they can assume that they must. They might just send out 1 million (1.4m landlords, 1m registered with hmrc) penalty fines for not filling in a tax return. Easy £100 million. And they get the tax later...

 

On 7/9/2015 at 8:29 PM, lastlaugh said:

I find it interesting that mortgage interest was never actually a deductible expense, it just appeared to work that way in practice.

We know there are a substantial number of BTLers who don't declare their rental income for tax. I have a hunch it's because they think they have set up their "business" in such a way as to not generate a profit, so there is nothing to declare.

The thing is, rental income and mortgage interest relief are two separate things and one never could be used to offset the other. The only way it could be done was through the tax return. So there is a potential legion of BTLers who never never filed a return, but should have, and could have, and would have been left in the same tax position anyway.

They will now have to claim the tax relief legitimately through tax returns. Their problem now will be, how do they get from outside the HMRC net, to inside, without exposing years of tax fraud?

 

On 7/11/2015 at 4:14 PM, Bland Unsight said:

OMG! Sorry I missed this. This is a really excellent point and picks up on Greg Bowman's point about HMRC and big data.

The idea of missing landlords idea has been bounced around the boards; I've never really looked into it, but I'm sure there's something to it. The mechanism must be that they fail to record their rental income on the self-assessment form at all. Another poster pointed out that the changes will motivate HMRC to find the missing landlords as now there is a very good chance that in due course money will be due.

Also worth pointing out that it will be a motivation for landlords who've been defrauding the Exchequer by not reporting income to bail at the earliest opportunity in order to avoid their accounts being looked into.

For example, if I was running the HMRC then in 2017 if my big data project directed me to some herbert who's had a BTL mortgage for 15 years and is suddenly showing a tax liability on a self-assessment form for the first time, I'd probably allocate some resources to working their file...

This thing just gets better and better and better.

"Sell now, sell everything." ;)

 

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1 hour ago, Venger said:

A good read.  ...

 

On 7/9/2015 at 8:29 PM, lastlaugh said:

I find it interesting that mortgage interest was never actually a deductible expense, it just appeared to work that way in practice.

We know there are a substantial number of BTLers who don't declare their rental income for tax. I have a hunch it's because they think they have set up their "business" in such a way as to not generate a profit, so there is nothing to declare.

The thing is, rental income and mortgage interest relief are two separate things and one never could be used to offset the other. The only way it could be done was through the tax return. So there is a potential legion of BTLers who never never filed a return, but should have, and could have, and would have been left in the same tax position anyway.

They will now have to claim the tax relief legitimately through tax returns. Their problem now will be, how do they get from outside the HMRC net, to inside, without exposing years of tax fraud?

I agree with many of the above quotes and in particular really like the idea of the above post, but is it actually true?  If rent less allowable expenses was under  £2.5k p.a. (pre-S24, presumably allowable expenses included interest payments) then only contacting HMRC was required, not completion of the tax return.

https://www.gov.uk/renting-out-a-property/paying-tax

You must contact HMRC if your income from property rental is less than £2,500 a year.

But you must report it on a Self Assessment tax return if it’s:

  • £2,500 to £9,999 after allowable expenses
  • £10,000 or more before allowable expenses

If you don’t usually send a tax return, you need to register by 5 October following the tax year you had rental income.

Edited by Bear Hug
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