HMRC Targets Private Landlords!

It is well publicised that the Government is committed to cracking down on tax avoidance and evasion, from individuals who bend the rules through to lawbreakers who evade their taxes altogether.  Whilst David Gauke (Exchequer Secretary to the Treasury) announced in his ‘Compliance Progress Report (March 2013)’ that the UK’s tax gap figures rank among the lowest in the world, the Government is still committed to investing almost £1 billion in HMRC in a clampdown on avoidance and evasion.  It is hoped that this investment will enable HMRC to secure £22 billion a year in compliance revenues by the end of 2014/15 – some 70 per cent more than 2010/11.

Since 2010 HMRC has carried out a number of specialist taskforces, targeting specific industries or locations, where there is evidence of tax evasion.  As part of this activity HMRC run specific campaigns, providing opportunities for individuals to come forward and voluntarily put their tax affairs in order.  The penalties imposed by HMRC for an unprompted disclosure under a tax campaign are more lenient than those who “choose not to pay up”.

It is believed that around a third of buy-to-let landlords could be dodging their tax on their rental income, at a cost estimated by HMRC of £550 million to the taxpayer.  It is therefore hardly surprising that HMRC announced it was launching a special taskforce in 2013 to target private landlords, initially in the south-east, in order to crackdown on those evading tax.

The latest campaign being rolled out is the ‘Property Sales Campaign’.  This provides an opportunity for individuals to bring their affairs up to date where they have sold a second or additional residential property, in the UK or abroad, and have not previously disclosed the capital gain and paid any tax that is due.  As part of this campaign individuals must also voluntarily provide HMRC with details of any previously undisclosed income, such as income from property or land rental.  To take advantage of this latest campaign individuals must voluntarily disclose their income or gains and pay any outstanding tax by 6 September 2013 (to take part in this campaign notification must be made to HMRC by 9 August 2013).

If you wish to discuss the issues raised in this article, please feel free to contact me at simon.boxall@wardwilliams.co.uk


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