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Saving For a Space Ship

HMRC's targeting of accidental landlords falls short

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my favourite quotes from it:

 

Quote

The government estimated up to 1.5 million landlords had underpaid or failed to pay up to £500m in tax between 2009 and 2010.

Quote

"While some landlords may not have been aware they should be paying tax, there are definitely some who just don't want to pay it so keep quiet."

 

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Was on a cruise lately 6 out of the 10 on our table said they had sold 2nd homes and paid no tax on the profit or even declared tenants income, there must be millions evaded UK wide

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23 minutes ago, papag said:

Was on a cruise lately 6 out of the 10 on our table said they had sold 2nd homes and paid no tax on the profit or even declared tenants income, there must be millions evaded UK wide

Sounds hellish 

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1 hour ago, papag said:

Was on a cruise lately 6 out of the 10 on our table said they had sold 2nd homes and paid no tax on the profit or even declared tenants income, there must be millions evaded UK wide

The one time norovirus doesn't turn up.

I thought the much-vaunted Connect system was supposed to expose these sorts of frauds. 

Wish there was a way for tenants to find out if landlords are paying their tax. Half the issue with negligent landlords seems to be that they're NOT paying tax and therefore inclined not to do any repairs or maintenance. 

Edited by PeanutButter

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Would be better if btl ll were made to pay monthly fees to HMRC rather than leave it to a tax return which is either not submitted or unlikely to be an honest reflection of reality.

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Are tories really going to make tory btlers pay tax? 

Maybe the assiduous Boot licking tory, but not the lottery-funding-pays- for- roof- repairs Tory, surely. 

 

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Its my intention that when I move out of the property I'm renting to let HRMC know the dates we rented the property, the amount we paid and the landlords details. I've no reason to suspect that our landlord is dodgy, and if they're not, it wont be a problem for them

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3 hours ago, papag said:

Was on a cruise lately 6 out of the 10 on our table said they had sold 2nd homes and paid no tax on the profit or even declared tenants income, there must be millions evaded UK wide

That's the problem with cruises - you have to mix with the type of people who go on cruises. 

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8 hours ago, Saving For a Space Ship said:

Call me cynical ... but perhaps another reason BTl landlords are increasingly rejecting  tennants on Housing benenfit is their

link to Gov. databases ?  

 

I honestly do not think the average landlord is that smart.

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11 hours ago, PeanutButter said:

The one time norovirus doesn't turn up.

I thought the much-vaunted Connect system was supposed to expose these sorts of frauds. 

Wish there was a way for tenants to find out if landlords are paying their tax. Half the issue with negligent landlords seems to be that they're NOT paying tax and therefore inclined not to do any repairs or maintenance. 

Its does.

The link quotes a solicitor saying that they'll only do the work on a porprty sale after the owner had sorted out the tax.

The link just confirms what been said on here for many years - the majority of new (IO BTL) are not 'canny businessman'. At best they are morons, ignorant of tax. At worst they are all out tax evaders.

 

 

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It is clear there is large scale evasion and ignorance. The question is why does hmrc choose not to pursue them? Is it a resourcing issue, is it incompetence or is it something more sinister?

HMRC could make billions if they did their job properly. 

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someone somewhere has worked out that the drop in house prices and the effect on the U.K. economy is more negative than the mountains of tax that could of been collected. 

HMRC don’t seem to really care about collecting upon the sitting ducks/easy targets. 

BTL prevented a huge HPC following the financial crisis, it was basically government policy to shift the debt from so called ‘innocents’ onto BTL’s, as if falls were to come it would be easier for the nation to stomach. 

we all know they could send tax demands on mass with little to no effort, I’m sure plenty of this site would happily volunteer to process the data free of charge! 

The fact that it is not happening points to a deliberate policy of allowing the Bent BTL’s getting away with it.

i suppose we are still on emergency interest rates, still secret gov cobra meetings going on about how to prevent the economic ship from slipping under. encouraging BTL and allowing tax avoidance/evasion is part of the governments remit, and although immoral, it’s probbably what they deem is for ‘the greater good’, those in charge are afterall BTL landowners/homeowners anyway. just throw the young under the bus. That’s policy. 

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11 hours ago, 24gray24 said:

Are tories really going to make tory btlers pay tax? 

Maybe the assiduous Boot licking tory, but not the lottery-funding-pays- for- roof- repairs Tory, surely. 

 

Are Tories really going to turn the current and next generations of 20-40something workers into lifelong Labour voters by denying them a chance at homeownership? Well they might, but that will be the end of the Tory party.

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11 hours ago, Goodafterbad said:

Its my intention that when I move out of the property I'm renting to let HRMC know the dates we rented the property, the amount we paid and the landlords details. I've no reason to suspect that our landlord is dodgy, and if they're not, it wont be a problem for them

Good for you, HMRC can always get people in the future.

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3 hours ago, dragging boot straps said:

It is clear there is large scale evasion and ignorance. The question is why does hmrc choose not to pursue them? Is it a resourcing issue, is it incompetence or is it something more sinister?

HMRC could make billions if they did their job properly. 

Until S24 it had not enough basis or past history to chase LLs.

Remember, IO BTL is very new. Its why the banks have grossly mis-priced it. And its why HMRC have not looked close enogh at it.

For HMRC to act there has to be some idea of money to get back. 

Until S24, it entirely possible that most IO BTL had no tax liability.

That is no longer the case with S24 - if theres a mortgage on BTL than theres a tax liability.

 

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13 hours ago, Goodafterbad said:

Its my intention that when I move out of the property I'm renting to let HRMC know the dates we rented the property, the amount we paid and the landlords details. I've no reason to suspect that our landlord is dodgy, and if they're not, it wont be a problem for them

Iy you pay pay bank transfer and there's a mortgage on the property then theyll know.

 

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9 minutes ago, spyguy said:

Iy you pay pay bank transfer and there's a mortgage on the property then theyll know.

OK, I didn't realise that. Who is obliged to notify HMRC? One of the banks involved?

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1 hour ago, Goodafterbad said:

OK, I didn't realise that. Who is obliged to notify HMRC? One of the banks involved?

HMRC have access to bank account info and land registry info and electoral roll.

All LL have to declare rental income on tax forms - even if not tax is due.

 

 

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I've met dozens of BTL people in my lifetime. Not one declared the income to HMRC. I know it's true because in N.I. BTL tax avoidance is like a badge of honour. When I openly asked if they declare they all said either no or they make no monthly profit. "It only pays off the mortgage". I've given up explaining only interest can be offset. 

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Surprised by the anecdotes here.  £500 million and 1.5 million landlords equals on average £333 unpaid tax.

This suggests most do declare the tax.

Its just not worth it. Penalties 2 to 3 x the unpaid tax plus porridge depending on severity and being forced to  show all documents last  12 years. The latter is probably the biggest nightmare.  Sleepless nights and fear of being dobbed in.

 

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On 25/03/2019 at 20:53, Goodafterbad said:

Its my intention that when I move out of the property I'm renting to let HRMC know the dates we rented the property, the amount we paid and the landlords details. I've no reason to suspect that our landlord is dodgy, and if they're not, it wont be a problem for them

I may list all my previous rented properties and then tell HMRC about all of them.

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