Taxman Targets Landlords
Buy-to-let landlords are handing over 13% more in tax to HMRC than in the previous tax year.
Buy-to-let investors paid Â£2.02bn in income tax on their rental income in 2010/11, up from Â£1.78bn due to HMRCâ€™s growing scrutiny of property investors.
There are two special task forces looking at private landlordsâ€™ tax affairs, one based in the south-east and the other in Yorkshire.
HMRC is also currently running a campaign under which people who have not declared a property sale (other than their main residence) are urged to come clean. The campaign ends on September 6th.
â€œOnce the deadline has passed, we expect HMRC to become more aggressive in pursuing undeclared rental income as well as property disposals,â€ said Mark Giddens, head of private client services at UHY Hacker Young. â€¨â€¨â€œBuy-to-let investors need to be aware of HMRCâ€™s increasing concern about tax evasion by landlords. Their actions to date show that they are quite capable of matching Land Registry records and data from letting agents with taxpayer files and picking out discrepancies.
â€œAs buy-to-let increases in popularity, there is inevitably more for HMRC to investigate. Some might simply fail to understand what their liabilities are and how to calculate them properly; others might think that they will be below HMRCâ€™s radar.â€