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ElPapasito

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This week's editorial from accountingWEB.co.uk, UK's biggest online community for accountants - (look its a fun, happening place right - so cut out the sniggering)

"HMRC is writing to people who own UK property they do not appear to live in and are not declaring rental income. The opening letter is mild in tone, but a non-response will escalate it into something rather more severe (and in the long run a S.9A challenge). The letters have been through a consultation process and are more felicitously phrased than some we have seen in the past.

There is no obligation to reply to the initial letter: but it would be stupid not to do so, especially since there will be many cases where there is no net profit because of mortgage interest.

HMRC is holding an enormous amount of data about property (not just UK property), bank accounts and so on, and is increasing the amount of data it exchanges with overseas tax authorities.

There will still be S.9A enquiries, but campaigns like this one on rental property will now be a major weapon in HMRC's armoury. People who have not declared income from non-UK property and UK bank accounts would be well advised to go to the taxman before he comes to them.

Best wishes

Simon Sweetman

Contributing Editor, AccountingWEB.co.uk"

Bye bye baby-amateur-BTLer bye bye...

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This week's editorial from accountingWEB.co.uk, UK's biggest online community for accountants - (look its a fun, happening place right - so cut out the sniggering)

"HMRC is writing to people who own UK property they do not appear to live in and are not declaring rental income. The opening letter is mild in tone, but a non-response will escalate it into something rather more severe (and in the long run a S.9A challenge). The letters have been through a consultation process and are more felicitously phrased than some we have seen in the past.

There is no obligation to reply to the initial letter: but it would be stupid not to do so, especially since there will be many cases where there is no net profit because of mortgage interest.

HMRC is holding an enormous amount of data about property (not just UK property), bank accounts and so on, and is increasing the amount of data it exchanges with overseas tax authorities.

There will still be S.9A enquiries, but campaigns like this one on rental property will now be a major weapon in HMRC's armoury. People who have not declared income from non-UK property and UK bank accounts would be well advised to go to the taxman before he comes to them.

Best wishes

Simon Sweetman

Contributing Editor, AccountingWEB.co.uk"

Bye bye baby-amateur-BTLer bye bye...

Interesting. I wonder whether the company based in a tax haven (Cayman Islands I think) that recently took over ownership of all the taxmans properties and then leased them back to them, also declares their profit :lol:

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This week's editorial from accountingWEB.co.uk, UK's biggest online community for accountants - (look its a fun, happening place right - so cut out the sniggering)

"HMRC is writing to people who own UK property they do not appear to live in and are not declaring rental income. The opening letter is mild in tone, but a non-response will escalate it into something rather more severe (and in the long run a S.9A challenge). The letters have been through a consultation process and are more felicitously phrased than some we have seen in the past.

There is no obligation to reply to the initial letter: but it would be stupid not to do so, especially since there will be many cases where there is no net profit because of mortgage interest.

HMRC is holding an enormous amount of data about property (not just UK property), bank accounts and so on, and is increasing the amount of data it exchanges with overseas tax authorities.

There will still be S.9A enquiries, but campaigns like this one on rental property will now be a major weapon in HMRC's armoury. People who have not declared income from non-UK property and UK bank accounts would be well advised to go to the taxman before he comes to them.

Best wishes

Simon Sweetman

Contributing Editor, AccountingWEB.co.uk"

Bye bye baby-amateur-BTLer bye bye...

I wonder why everyone assumes that all BTL landlords won't have declared their income?

I think that many / most will: given that you can offset a lot of costs against the rental income (all your interest, insurance premiums, letting agent fees, advertising costs, repairs/maintenance, etc)

I have always declared mine: the amount of tax payable can end up being pretty small, and its worth it just so you can sleep easy and not worry abotu HMRC knocking on your door at some point in the future.

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Good - if they re out BTL hunting maybe they'll leave off the frivolous investigation of the self employed for a bit? On the other hand, maybe this department is the home of all those new public servants that have been hired to keep he unemployment figures down? :rolleyes:

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I wonder why everyone assumes that all BTL landlords won't have declared their income?

I think that many / most will: given that you can offset a lot of costs against the rental income (all your interest, insurance premiums, letting agent fees, advertising costs, repairs/maintenance, etc)

I have always declared mine: the amount of tax payable can end up being pretty small, and its worth it just so you can sleep easy and not worry abotu HMRC knocking on your door at some point in the future.

I agree, it's a bit of a non-story really. Basic maths tells me that BTL is not a way to a decent annual return on my investment, in fact I'd be shocked to find any of the more recent "investors" are making any kind of return after costs.

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Guest tenant super
I wonder why everyone assumes that all BTL landlords won't have declared their income?

I think that many / most will: given that you can offset a lot of costs against the rental income (all your interest, insurance premiums, letting agent fees, advertising costs, repairs/maintenance, etc)

I have always declared mine: the amount of tax payable can end up being pretty small, and its worth it just so you can sleep easy and not worry abotu HMRC knocking on your door at some point in the future.

And I thought all landlords offset maintenance costs from tenants deposits. Raises an interesting question does it not, should tax be paid on withheld deposits??

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And I thought all landlords offset maintenance costs from tenants deposits. Raises an interesting question does it not, should tax be paid on withheld deposits??

Deposits held in special schemes now to protect them

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I never thought I'd get a warm glow from reading one of those 'iron hand in a velvet glove' missives from the HMRC.

:lol: :lol:

As someone who has enjoyed the ir35 worries, followed by the swingeing increases in company NI rates... my glow is now as warm and fuzzy as my silly bear suit.

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Guest Charlie The Tramp

Local Tax offices scan local and national newspapers where they pick up very useful information.

I remember a Guy who inherited his parents RTB and decided to rent it out in January 1990 advertising it in the local rag.

They waited to see if he declared it in his tax return and pounced in June of that year. ;)

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As someone who has enjoyed the ir35 worries, followed by the swingeing increases in company NI rates... my glow is now as warm and fuzzy as my silly bear suit.

Err....

You forgot to mention S660A....

... and now the spiteful 'Income Shifting carp (anag) that they are trying to put in place since the courts told them that their recent reinterpretation of S660A is a load of genitalia (I paraphrase, obviously, but you get the point, I'm sure).

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here is an example of the letter they are sending out - if any non-complying landlords out there are reading this thread :P

http://www.accaglobal.com/documents/HMRC_Letter.pdf

Sounds like a fishing expedition to me.

HOWEVER I would think it's fairly easy to establish if the property is tenanted by checking the electoral register. Alternatively a quick phonce call and chat to the tenants should do the trick.

I wonder how far back they can backdate the tax due? :blink: Ouch that's gotta hurt!

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It may be the eventual CGT resulting from the mass exedous of the BTL brigade that they are keen to pick up on (although if prices fall as much as many of us believe in then the revenue may find themselves agreeing to capital losses being carried forward instead) . Tax on rental income for many will be relatively small beer.

Gate crashing the party just as the guests are leaving, better times would have been had a couple of years earlier

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I have information that suggests that your client has received rent from property but has not

included it in his/her Tax Return.

Dear Sirs

I am not willing to waste my chargeable time on what appears suspiciously like a "fishing expedition".

If you wish me look into the matter further please provide full copies of the information to which you refer and confirm in writing that I will be able to bill you for my time in investigating this matter.

Upon receipt of this information I shall make enquiries of my client.

Kind regards

Yours

A.N.Accountant

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I can't see this doing much financially since most recent amateur purchases will probably not be making any annual profits. But it'll certainly add to the gloom - especially where someone suddenly finds a tax return in the post where they never had to fill one in before.

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  • 296 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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