Mikhail Liebenstein Posted August 3, 2020 Report Share Posted August 3, 2020 I know HMRC always threatens crackdowns, but apparently last year only 60,000 landlords told HMRC that they owed any tax: https://www.telegraph.co.uk/property/buy-to-let/thousands-fewer-landlords-caught-hmrcs-tax-probe-experts-warn/ Apparently, 60,000 is only 4% or what HMRC was expecting, so it looks like HMRC have a nice big pool of 1.5m landlords to go fishing in! That should keep them fruitfully occupied. (Not the sort of occupation landlords were expecting). Quote Link to post Share on other sites
Sausage Posted August 3, 2020 Report Share Posted August 3, 2020 4 minutes ago, Mikhail Liebenstein said: I know HMRC always threatens crackdowns, but apparently last year only 60,000 landlords told HMRC that they owed any tax: https://www.telegraph.co.uk/property/buy-to-let/thousands-fewer-landlords-caught-hmrcs-tax-probe-experts-warn/ Apparently, 60,000 is only 4% or what HMRC was expecting, so it looks like HMRC have a nice big pool of 1.5m landlords to go fishing in! That should keep them fruitfully occupied. (Not the sort of occupation landlords were expecting). No wonder the tax changes for BTL (discussed in the "countdown to leveraged..." Thread) have had a very muted effect. The landlords haven't been paying tax bills at all! Quote Link to post Share on other sites
winkie Posted August 3, 2020 Report Share Posted August 3, 2020 I thought creating new jobs and collecting new taxes was a priority.? Quote Link to post Share on other sites
highcontrast Posted August 3, 2020 Report Share Posted August 3, 2020 Whilst good news hopefully, is anyone else absolutely fuming so few are actually even declaring their rental income? Absolute scum. We should all be reporting local landlords, chances are they aren't declaring. Quote Link to post Share on other sites
dragging boot straps Posted August 3, 2020 Report Share Posted August 3, 2020 Seen this threat countless times over the last 10 years. Nothing ever happens. I reported 3 x undeclared landlords that I know about just to see what would happen.... Nothing has happened but I'd say it's a good £50k missed from those 3 alone. As well as my report they are all second home owners so the information is there. Just not the will. Quote Link to post Share on other sites
Mikhail Liebenstein Posted August 3, 2020 Author Report Share Posted August 3, 2020 22 minutes ago, highcontrast said: Whilst good news hopefully, is anyone else absolutely fuming so few are actually even declaring their rental income? Absolute scum. We should all be reporting local landlords, chances are they aren't declaring. Yes, I’m fuming as should any PAYE income taxpayers be. Quote Link to post Share on other sites
PeanutButter Posted August 3, 2020 Report Share Posted August 3, 2020 34 minutes ago, Mikhail Liebenstein said: I know HMRC always threatens crackdowns, but apparently last year only 60,000 landlords told HMRC that they owed any tax: https://www.telegraph.co.uk/property/buy-to-let/thousands-fewer-landlords-caught-hmrcs-tax-probe-experts-warn/ Apparently, 60,000 is only 4% or what HMRC was expecting, so it looks like HMRC have a nice big pool of 1.5m landlords to go fishing in! That should keep them fruitfully occupied. (Not the sort of occupation landlords were expecting). WTF. I’m in the 4%. Other landlords suck. Quote Link to post Share on other sites
PeanutButter Posted August 3, 2020 Report Share Posted August 3, 2020 8 minutes ago, dragging boot straps said: Seen this threat countless times over the last 10 years. Nothing ever happens. I reported 3 x undeclared landlords that I know about just to see what would happen.... Nothing has happened but I'd say it's a good £50k missed from those 3 alone. As well as my report they are all second home owners so the information is there. Just not the will. Write to your MP? Quote Link to post Share on other sites
Pebbles Posted August 3, 2020 Report Share Posted August 3, 2020 This is why I have such great reservations of section 24. It relies on the landlord declaring their income. There is some proper rubbish spouted on here about how this would decimate landlords but it seems not only do HMRC not really feel the need to actually get the tax owed. But it seems the tax really seems to be volentary to declare. I have no confidence in any of HMRC crackdown. They seem like Mark Carney threaten one thing but never actually do it. Quote Link to post Share on other sites
Badhairday Posted August 3, 2020 Report Share Posted August 3, 2020 Landlords are normally so over leveraged, I doubt that they have much tax to pay, after mortgage, voids, repairs, losses from a previous bad tenancy, paying the estate agent his cut etc. If they have any profits, all they have to do is remortgage to reduce taxable profit. The equity released is probably another incentive for them to buy another property... Quote Link to post Share on other sites
Freki Posted August 3, 2020 Report Share Posted August 3, 2020 12 minutes ago, Badhairday said: Landlords are normally so over leveraged, I doubt that they have much tax to pay, after mortgage, voids, repairs, losses from a previous bad tenancy, paying the estate agent his cut etc. If they have any profits, all they have to do is remortgage to reduce taxable profit. The equity released is probably another incentive for them to buy another property... Profitability not withstanding, you have to declare your income Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 33 minutes ago, dragging boot straps said: Seen this threat countless times over the last 10 years. Nothing ever happens. I reported 3 x undeclared landlords that I know about just to see what would happen.... Nothing has happened but I'd say it's a good £50k missed from those 3 alone. As well as my report they are all second home owners so the information is there. Just not the will. Not how it works. HMRC assume you are being honest when you dont declare income. Before S24 it was possible for a IO BTL LL to borrow ~2m and let out several homes and have *NO* tax to pay. Post S24 thats not the case. HMRC have politely asked LL to fill in a return even if theyve got no tax to pay. Theyve also run a radio campaign informing LL of this and other changes. They are being very very nice. A LL is a commercial operator. HMRC assume that commercial operators know what they are doing. HMRC *know* everything about a LL - they have the housing owned, any bank transactions, the mortgage etc etc,. Quote Link to post Share on other sites
Pebbles Posted August 3, 2020 Report Share Posted August 3, 2020 1 minute ago, spyguy said: Not how it works. HMRC assume you are being honest when you dont declare income. Before S24 it was possible for a IO BTL LL to borrow ~2m and let out several homes and have *NO* tax to pay. Post S24 thats not the case. HMRC have politely asked LL to fill in a return even if theyve got no tax to pay. Theyve also run a radio campaign informing LL of this and other changes. They are being very very nice. A LL is a commercial operator. HMRC assume that commercial operators know what they are doing. HMRC *know* everything about a LL - they have the housing owned, any bank transactions, the mortgage etc etc,. Yet still no tax seems to be collected. Quote Link to post Share on other sites
byron78 Posted August 3, 2020 Report Share Posted August 3, 2020 It's laissez-faire capitalism. Most of you on here champion it. Oh look. You want to state to do more now, don't you? Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 18 minutes ago, Pebbles said: Yet still no tax seems to be collected. Not how it works They need a basis for going out after people. S24 changes the ruls so that there is tax charge for IO BTL. HMRC will take a few sample cases and go thru their books. That gives them a basis to go after the rest. The headlines have mangled the meaning: Thousands fewer landlords caught by HMRC’s tax probe – but experts warn of a post-Covid crackdown Less than 60,000 landlords have told HMRC they owe it tax – only 4pc of the total number the tax office estimated had underpaid. HMRC know how many , to the ~90%, should be paying tax. They are waiting for the tax returns to be filed. HMRC expects 1m+ LL to file tax returns. It knows that number as it has all the details on the mortgage and land registry. Only 60k did. HMRC have 20 years to go after tax evasion. Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 38 minutes ago, Badhairday said: Landlords are normally so over leveraged, I doubt that they have much tax to pay, after mortgage, voids, repairs, losses from a previous bad tenancy, paying the estate agent his cut etc. If they have any profits, all they have to do is remortgage to reduce taxable profit. The equity released is probably another incentive for them to buy another property... S24 changed that. A LL will have to pay at least ~30% of rental income as tax. Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 46 minutes ago, Pebbles said: This is why I have such great reservations of section 24. It relies on the landlord declaring their income. There is some proper rubbish spouted on here about how this would decimate landlords but it seems not only do HMRC not really feel the need to actually get the tax owed. But it seems the tax really seems to be volentary to declare. I have no confidence in any of HMRC crackdown. They seem like Mark Carney threaten one thing but never actually do it. No, no no no. HMRC have *everything* - land registry ownership records, mortgage details, LL bank details, tenants bank details. Its all tracked. The obligation is for the LL to declare the income. or else. Quote Link to post Share on other sites
GodlessEndeavor Posted August 3, 2020 Report Share Posted August 3, 2020 1 minute ago, spyguy said: No, no no no. HMRC have *everything* - land registry ownership records, mortgage details, LL bank details, tenants bank details. Its all tracked. The obligation is for the LL to declare the income. or else. Just because it's tracked doesn't mean they are processing the data or using it? Quote Link to post Share on other sites
Frugal Git Posted August 3, 2020 Report Share Posted August 3, 2020 (edited) Patience. Everytime I think I'm In danger of underpaying/overpaying tax, I report it to HMRC. They seem to confirm everything and can see whatever they want these days. But they can be slow to pick up on things until you prompt them (for instance getting tax back!). Unless those 96% of landlords are collecting in cash and laundering the money very cleverly, I think HMRC is just biding their time until the data is properly processed and its party time. These rules are still *relatively* new. Might as well wait and give people more time so the scale of the fraud becomes a national scandal. Edited August 3, 2020 by Frugal Git Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 1 minute ago, GodlessEndeavor said: Just because it's tracked doesn't mean they are processing the data or using it? They are. Quote Link to post Share on other sites
Killer Bunny Posted August 3, 2020 Report Share Posted August 3, 2020 44 minutes ago, byron78 said: It's laissez-faire capitalism. Most of you on here champion it. Oh look. You want to state to do more now, don't you? It’s fraud. NOTHING to do with system. Quote Link to post Share on other sites
PaulTW Posted August 3, 2020 Report Share Posted August 3, 2020 34 minutes ago, Frugal Git said: Might as well wait and give people more time so the scale of the fraud becomes a national scandal. Granted your point on time and newness but from the off, 96% is a national scandal. Couple this with the pressures on public finances due to Covid and if this is widely publicised I would expect the public, particularly PAYE taxpayers, to be livid. HMRC should be on this from the off. Is this being reported anywhere else this morning aside from the Telegraph? Not seen anything on the BBC, conveniently... Quote Link to post Share on other sites
Killer Bunny Posted August 3, 2020 Report Share Posted August 3, 2020 Have tax collectors been Furloughed? Quote Link to post Share on other sites
crazypabs Posted August 3, 2020 Report Share Posted August 3, 2020 Section 24 only applies to those who have the property in their own name. Those LL who sold the houses to ltd co to attract the mortgage interest relief against tax still had to pay sdlt and probably CGT on transfer. Now they are ltd companies they are a lot more transparent to HMRC. Not as easy to disguise the property Quote Link to post Share on other sites
spyguy Posted August 3, 2020 Report Share Posted August 3, 2020 1 minute ago, crazypabs said: Section 24 only applies to those who have the property in their own name. Those LL who sold the houses to ltd co to attract the mortgage interest relief against tax still had to pay sdlt and probably CGT on transfer. Now they are ltd companies they are a lot more transparent to HMRC. Not as easy to disguise the property Few have done this. They cannot afford the extra IRs. And most BTL mortgages will not lend to ltd Co. Quote Link to post Share on other sites
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