Tax News
Revenue Denies Landlords’ Tax Crack Down
HM Revenue and Customs has been forced to issue a statement denying that there is to be a clamp down on Landlords who do not declare income from letting properties.
Around 500 letters are thought to have been sent to landlords and their agents in recent weeks, asking for clarification of the income declared on returns. It is considered widely that this may be the start of a serious campaign by the Revenue to target non-declaration of income from rental properties.
There are over 400,000 buy-to-let mortgages at present in the UK. Estimates show that as many as one in five of these have been incorrectly declared. This could mean up to 80,000 landlords who have either claimed too many tax reliefs, or not declared income at all.
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The accountancy profession is being rightly cautious of this, and landlords are being urged to ensure all income is correctly shown on tax returns. It is thought that many of the landlords were new to buy-to-let and may not be fully conversant with the complexities of the tax laws surrounding income from property.
However, HMRC has been at pains to reassure landlords that this was not the first part of a major clamp down.
A spokesman said: “We are not planning a tax crackdown or to otherwise target landlords.”
Such rumours of a clamp down are not new. Last year HMRC officials met with the accountancy profession. At that time it was stated that the meeting was part of an exercise designed to find out how best to educate landlords, and the official statement then was almost identical to that shown here.
Is the Revenue about to come down heavily on Landlords? It is difficult to say. It could be a precursor of a more concerted campaign, or it could be mere supposition. One thing is certain, if you are unsure about whether, or think you may not have declared the correct income, you should take professional advice on the matter as failure to pay the correct tax could become very costly in the long term if you are found out.
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