HMRC turns up heat on landlords
The taxman will send 40,000 letters to landlords it suspects are not paying enough tax this year
8:20AM BST 03 Aug 2014
The tax office has stepped up its scrutiny of landlords, sending letters to thousands of buy-to-let investors it suspects of bending the rules in order to pay less tax.
The letters, which will be sent to 40,000 landlords over the next four months, ask the recipient to make contact to arrange their affairs – or run the risk of a large fine or a criminal investigation.
An estimated 5,000 landlords have been sent the letters, which provide a 30-day window to respond before action is taken.
While HM Revenue & Customs (HMRC) has targeted property owners for three years, accountants said the past year had seen its approach toughened. It is understood that additional manpower has been deployed to hunt down the £500m underpaid each year. Tens of thousands of landlords are believed to be paying little or no tax on rental income and capital gains made on second properties.
Last October the taxman began a campaign to encourage landlords to come clean. As well as those with undeclared rental earnings, HMRC is also targeting landlords who have filed inaccurate tax returns.
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