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HMRC going after landlords after "fruitless" Let Property campaign

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15 minutes ago, Chrippie said:

Amazing stats if true...according to the CML the mean rent per landlord in this country is 17300 pounds. So if the 900,000 who haven't been paying tax are average thats 15billion of undeclared rental income per year. Even allowing for leverage and pre s. 24 your looking at maybe 5-6bn of undeclared profit per year. Assume they go back 5 years its a 25-30bn source of undeclared profit for HMRC to go afte. 

Lets say 1 in 10 dont have the money to pay and have the average portfolio of 2.7 properties then in the bankruptcy you could be seeing 330000 properties getting sold to settle their tax bill. Versus around 1.2m property transactions per year in this country. 

These are huge figures. Its a potential game changer. 

Plus potential undeclared CGT (both sales and taking excess equity out on a remortgage) and cheating on expenses, etc.

Edited by Fence

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5 minutes ago, Chrippie said:

Amazing stats if true...according to the CML the mean rent per landlord in this country is 17300 pounds. So if the 900,000 who haven't been paying tax are average thats 15billion of undeclared rental income per year. Even allowing for leverage and pre s. 24 your looking at maybe 5-6bn of undeclared profit per year. Assume they go back 5 years its a 25-30bn source of undeclared profit for HMRC to go afte. 

Lets say 1 in 10 dont have the money to pay and have the average portfolio of 2.7 properties then in the bankruptcy you could be seeing 330000 properties getting sold to settle their tax bill. Versus around 1.2m property transactions per year in this country. 

These are huge figures. Its a potential game changer. 

Actually thinking some more about this it is tax evasion not avoidance. HMRC should be starting on the basis of 100% penalties. Thinking of 10% not having the money to pay all the tax due over several years plus 100% penalties might be very conservative.

 

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Just now, Chrippie said:

Actually thinking some more about this it is tax evasion not avoidance. HMRC should be starting on the basis of 100% penalties. Thinking of 10% not having the money to pay all the tax due over several years plus 100% penalties might be very conservative.

 

30 days to pay tax I believe and many are probably over leveraged and lack liquidity because they don't understand the investments they made.  

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Looking forward to the "I didn't realise I had to pay tax on my rental profits and I've just got a letter from HMRC" posts on parasite118. Can't be long now. Popcorn time :-)

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3 minutes ago, oatbake said:

Looking forward to the "I didn't realise I had to pay tax on my rental profits and I've just got a letter from HMRC" posts on parasite118. Can't be long now. Popcorn time :-)

few of these would not go a miss. lets cheer when some parasites top themselves.

noose-e1337727704742.jpg

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12 minutes ago, oatbake said:

Looking forward to the "I didn't realise I had to pay tax on my rental profits and I've just got a letter from HMRC" posts on parasite118. Can't be long now. Popcorn time :-)

The information being asked for is for 2016/17 returns so the information should already be filled in people’s tax returns.

that means It won’t be just a letter it will be a letter opening a tax enquiry and I would bet my house the responses returned to HMRC will be so bad that they will result in some of those cases being extended back 10-20 years

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1 hour ago, longgone said:

few of these would not go a miss. lets cheer when some parasites top themselves.

noose-e1337727704742.jpg

Not like they can jump out of the roof of their HMO

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topping themselves is too easy, it must end with them being in the same position they forced others into, in a hmo bedsit with the bed propped against the wall at a 30 degree angle because the room is too small to accomodate it and the cooker hob reachable from anywhere in the room.

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10 hours ago, Houdini said:

 

It's actually not that much for years prior to this year due to all the generous credits that were tax deductible. 

Also I've just found the spreadsheet that he needs to fill in  and its not actually difficult

https://www.gov.uk/government/publications/notes-for-returns-of-information-under-schedule-23-of-the-finance-act-2011-rents-and-other-payments-arising-from-land-t19-5fa

But it's THREE HUNDRED entries, goddamit man! 

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22 minutes ago, Si1 said:

But it's THREE HUNDRED entries, goddamit man! 

And gfiven that he earns £50 (minimum, possibly £100 or more) a month from each entry its not much work for the £180,000 (300 properties @ £600 a year) he skims off the landlords nor the £1.8m his company handles in rent

Edited by Houdini

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And they've had to deal with tax on overseas landlords for a long time now (maybe HRMC should just extend it - best the agents keep their heads down and don't complain too much):

The Non-resident Landlord Scheme

A landlord who lives abroad for more than 6 months of the year must pay tax on any income they get from renting out property in the UK. 

The tax can be paid by either:

. a letting agent. If you’re a letting agent you must operate the Non-resident Landlord Scheme no matter how much rent you collect, unless HMRC has told you in writing that the landlord can receive the rent with no tax deducted. You may still need to register and complete an annual report.  You’re considered a letting agent under the scheme if you: help the landlord run their UK rental business; receive their rent or control where it goes; live in the UK for more than 6 months a year.  A letting agent can be an estate agent, solicitor, accountant or friend of the landlord. You’re not a letting agent if you only give a landlord legal advice or services.  Rental income can include money received for a wide variety of things such as:........

. the tenant.  If your landlord lives abroad and you pay over £100 a week, you need to register with HMRC and deduct tax from your rent.  You also need to register with HMRC if you pay a UK representative of your landlord, such as a friend or family member, who isn’t a letting agent. You don’t need to deduct the tax if HMRC has told you in writing that the landlord can receive the rent with no tax deducted, but you must still register with HMRC and complete an annual report.

. tenant-finders.  If you’re a tenant-finder you don’t have to pay tax under the Non-resident Landlord Scheme if you collect your own fee for finding a tenant from rent payments and: rent is collected for no more than 3 months; and the tax is no more than £100.

Edited by Fence

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9 hours ago, Eddie_George said:

I think the tenants should be made to fill out his forms.

I'm 45 years old and 3 years ago my wife and I were evicted from our 'home' of 4 years - 3 weeks before our first child was born. All because the owner of the property refused to secure a broken banister rail with a 16 foot drop floor to floor and didn't like being called a lier when she tried to convince me that "rats don't carry diseases that can harm infants" in order to avoid a £45 pest control call out fee!

Transpires that she was intentionally committing mortgage fraud, and everything that goes with it, and had been for over 10 years - I requested 'consent to let' from the letting agents who had served the retaliatory eviction and they basically told me to f off and that they had no legal obligation to do anything of the kind - even though, by accepting payment in relation to the property, to the letter of the law they were in fact money laundering.

Letting agents and the leeches they serve are the scum of the earth.

Letting agents should be the ones to fill out forms and they should be held jointly liable for any criminal activity relating to properties on their books.

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11 hours ago, oatbake said:

I guess it depends how their data is structured and how competent the letting agent is with Excel etc (probably not very!). 

They could be talking about several years worth of data don't forget. For 300 properties. 

Even assuming his IT knowledge is limited to cut and paste and he does the whole thing manually, it cannot be more than a days work to set up and once done an hour or two each year after that.  

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3 minutes ago, Freki said:

Has/Can HMRC ask the big lenders for their BTL portfolio details?

I would imagine that HMRC are legally entitled to demand anything they want. 

I still don't understand why there has not been a more visible scare campaign, e.g. on TV, social media, hoardings in the street. I've posted before on here about a fairly senior medic more or less boasting about never having declared rental income.  Should imagine there are plenty still thinking there's a very fair chance of getting away with it.   

 

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10 hours ago, Chrippie said:

Amazing stats if true...according to the CML the mean rent per landlord in this country is 17300 pounds. So if the 900,000 who haven't been paying tax are average thats 15billion of undeclared rental income per year. Even allowing for leverage and pre s. 24 your looking at maybe 5-6bn of undeclared profit per year. Assume they go back 5 years its a 25-30bn source of undeclared profit for HMRC to go afte. 

Lets say 1 in 10 dont have the money to pay and have the average portfolio of 2.7 properties then in the bankruptcy you could be seeing 330000 properties getting sold to settle their tax bill. Versus around 1.2m property transactions per year in this country. 

These are huge figures. Its a potential game changer. 

They can go back 12 years and as it is tax evasion, the penalty is 2 -3 times the tax due so you could triple this

 

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Following up - the key to how important this could be is if it truly is half of all landlords across the country not declaring. If so, and if they are forced into declaring it makes HPC almost inevitable imo, given the likely scale of fines and back taxes, and the fact that house prices are set at the margin. We should be doing everything we can to force HMRC to act. This article would seem to back up the idea that it is half:

https://www.theguardian.com/business/2017/aug/13/half-of-landlords-in-one-london-borough-fail-to-declare-rental-income

If this is the case then it is a national scandal that this has been going on without apparently a serious attempt to crack down on it so far. BTL mortgages came into being over 20 years ago ffs. HMRC will have been aware of the discrepancy between the numbers declaring and the number of mortgages for decades. Tax evading landlords need to be prosecuted and if the evaded tax is sufficiently high, jailed for what they have done.  I would join/financially contribute to a pressure group attempting to force the government/HMRC to act and without favour on these people. 

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3 minutes ago, Chrippie said:

 

If this is the case then it is a national scandal that this has been going on without apparently a serious attempt to crack down on it so far. BTL mortgages came into being over 20 years ago ffs. HMRC will have been aware of the discrepancy between the numbers declaring and the number of mortgages for decades. Tax evading landlords need to be prosecuted and if the evaded tax is sufficiently high, jailed for what they have done.  I would join/financially contribute to a pressure group attempting to force the government/HMRC to act and without favour on these people. 

I have to wonder what the motives are for this collective inertia? It can’t be simple incompetence? There must be a reason- likely political?

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4 minutes ago, btl_hater said:

I have to wonder what the motives are for this collective inertia? It can’t be simple incompetence? There must be a reason- likely political?

But if that's the case we should be pushing against it. This is an open goal for us. We are a group of people who believe this country would be a better, fairer, happier place post- HPC. Most other catalysts to achieve that aim have potentially negative effects that can be used to argue against them:

Interest rates should go up - but hang on we're protecting the economy?

Property taxes should go up - but what about all the old grannies who are asset rich but cash poor?

We should build more homes - but what about protecting the green belt etc?

But no politician is going to publicly defend tax-evading landlords. We should be pushing hard on this to force the inertia to change. It would be popular across the country, and bring about what we want.

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59 minutes ago, Mapatasy said:

I'm 45 years old ....

Just to be clear, a tongue in cheek suggestion in which some tenants might enjoy ensuring their landlords pay tax.  Yes, the current rental situation is a dirty business.  The cult of the "not so gifted amateur" we seem to admire here.  I've rented for many years around Europe - not perfect but another planet.

PS.  It particularity hurts to hear of any family which does not have a secure and decent roof over it's head.

Edited by Fence

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