The launch of a new landlord database, proposed by the Renters Reform Bill, could provide HMRC with a gold mine of information with which to pursue landlords for unpaid tax.
The warning comes from accountancy and business advisory firm BDO which says that - as yet - the Bill does not make clear whether HMRC will get full access to all information submitted as part of the registration process.
The similar Register of Overseas Entities, already in place, does give HMRC full and automatic access and BDO warns that it is reasonable to assume that the Revenue will make use of any publicly accessible landlord data for compliance activities.
The advisory service says HMRC is keen to ensure landlords declare their rental profits and gains on sale so they pay the tax they owe. It encourages those who have made mistakes to voluntarily correct their position by using the Let Property Campaign, part of HMRC’s Digital Disclosure Service, or other disclosure processes.
Further property data will also become available after the Land Registry implements the new information requirements in the separate Levelling Up and Regeneration Bill, aimed at extending transparency of property ownership and transactions.
HMRC will combine any new data from the landlord database with that which it can already access such as the Land Registry’s records, the Register of Overseas Entities owning UK property and the data within HMRC’s own Connect database, which reportedly holds over 55 billion pieces of data.
This wealth of data analysis should help HMRC identify cases for investigation with a view to charging tax, late payment interest and tax-geared penalties.
Dawn Register, head of tax dispute resolution at BDO, says: “HMRC already holds significant information on taxpayers’ financial affairs. The introduction of a new private rented sector database will leave few places to hide for landlords who don’t comply.
“Any landlords who don’t currently pay the right amount of tax would be well advised to bring their UK tax affairs up to date before the register is introduced.
“In addition to providing peace of mind, making an unprompted disclosure should lead to lower tax-geared penalties for errors, compared to rectifying mistakes after HMRC gets in contact. It will also help to mitigate late payment interest - which is currently at a 14-year high of 6.75 per cent per annum and due to rise to 7.0 per cent from May 31.”
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Pick on the small easy targets as usual
What about the likes of Amazon , Apple and Microsoft ??
Or would that clash with the 'Agenda' .....
Great point, why are we as small fry in comparison having to pay tax on our profits yet their profits which literally run into billions pay two parts of F all...!
One name one address and easily tracked, I have been investigated three times in the last 10 years and not overly bothered about it as I have nothing to hide. One error in all three investigations which I still do not agree with of 200quid for my phone bill.
We all have to pay our tax. I’ve paid all mine. Why should others be allowed to dodge paying tbeirs? Yes Amazon and the rest should also pay, I get that.
The ones who get away with it now are suddenly not going to put their name down 😂😂👎🏻👎🏻
My thoughts exactly. Bad landlords already avoid licencing until forced or prosecuted. They will just end up with a list of good, compliant landlords and the rogues will continue on their merry way.
It’s all part of clearing the decks the Big Boys are coming.
Absolutely!
If we are all registered landlords, paying what we owe, then I don’t see a problem. As long as they don’t want to start charging us for their service…I’m ok with it! HMRC like most Government departments are a shambles and I reckon it would take them a long time to find those this is targeted at.
Agreed John, not a problem paying it if I owe it. The issue is the keep coming back to people that are paying and not hitting the ones that are not.
They take the easy route and end up collecting very little in the greater scheme of things.
Are we not all Registered already making a Return every year. Landlords paying lumps in January & July.
Land Registry know who all Property owners are and if you have a licensed property / HMO etc, they know everything about you whether leaseholders, Freeholder, who you lender is etc. They write to your lender, your Banks, your wife, your Tenants, your Solicitors and the Cat, to see what dirt they can dig up on you. Totally unnecessary but don’t be thinking they can’t access information, it only takes milliseconds.
They have a very powerful system called Connect. It checks things like DVLA records for expensive vehicles etc to see if it fits with what they think / you say you earn. Credit card statements etc.
Absolutely. HMRC/VOA/LR plus agent returns. They have enough data to find the vast compliant majority. It’s the crooks and money launderers who don’t register- and even the FOA exercise last year - which had us all going through ridiculous hoops- has failed to pick up the serious money. Naive at best. Busy fools all.
Good. Tax evasion is wrong whatever your circumstances. I pay all my tax due whatever. I may be angry that I’m treated unfairly as a high rate tax paying BTL investor but that hadn’t made me want to commit fraud. Tax is a necessary element of any well functioning society and we all play our part.
Agreed, but is the anger down to those not paying or more to do with wanton waste throughout the system. Personally it is the waste which we can all see daily...
I imagine there are far fewer landlords not declaring their income than HMRC imagine. The minority slumlords are not suddenly going to register themselves.
The Tax Bonanza will be from small landlords being driven out by the Government selling up and paying Capital Gains Tax . They are also raking it in from Section 24 by taxing Landlords on non existent Profit. Plus Stamp Duty if a Larger Landlord buys your Property up at a big discount and pays stamp duty.
With an Housing Shortage an increase in rents hence more tax .
On the Flip side a cost to house the Homeless , more evictions du to rent arrears.
Please login to comment