Landlords targeted in HMRC campaign

Residential landlords are the focus of HM Revenue & Customs latest campaign to uncover tax avoiders. 

The campaign which starts this month will ensure that anyone who has ever sold a second home – including holiday homes and buy-to-let investments – has fully paid their Capital Gains Tax (CGT).  It is also using information from local councils to track down domestic landlords who have failed to declare their rental income.

The initiative is the latest in a string of campaigns by HMRC to encourage voluntary disclosure amongst individual taxpayers who have not properly settled their affairs.

In the past few weeks landlords have been receiving letters from HMRC asking for information on property addresses, letting periods, number of tenants and how much rent they receive.  They can also ask whether the property was purchased, inherited or gifted and investigations could go back as far as 20 years.

Some within the industry have criticised HMRCs approach for not being targeted enough.  Mike Down, Head of Tax Risk and Investigation Management at Baker Tilly claimed that HMRC were ‘unnecessarily wasting the time of tax-abiding taxpayers’ by sending letter to landlords who had already fully declared their rental income on their annual Self-Assessment Tax Returns.  He commented;

“Surely it’s time HMRC was more careful with its precious resources and invested time in carefully checking third-party information before sending what might be viewed as scarily aggressive letters to those who are fully tax compliant.”

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