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HMRC cracks down on property tax cheats
25 June 2014
Threatening letters from the tax man are thumping on to the doormats of landlords who may have failed to declare property profits.
The letters are telling landlords that HM Revenue & Customs (HMRC) suspects they have been avoiding tax and should clear up their financial affairs within 30 days – or else face hefty fines and penalties.
Thousands of landlords are receiving the letters as part of the Let Property Campaign, an HMRC scheme offering discount penalties for declaring unpaid tax.
The campaign is an ongoing bid to recover £500 million a year in ‘lost’ tax that the Treasury suspects property investors should pay but have failed to report to HMRC.
“HMRC has data relating to landlords and is comparing this with what individuals have or have not told us,” says the letter. “HMRC is aware you are a landlord who is letting property and that you may be liable to tax on that income.”
HMRC claims to have built a financial profile of property investors by cross-matching data from the Land Registry, voter lists, council housing benefit claims and letting agents.
To volunteer information about unpaid tax, landlords should call the HMRC on 03000 514479.
Registering with HMRC then gives them 30 days to finalise any outstanding tax matters and pay any money due – in return for coming forward, HMRC offers reduced penalties for failing to declare the tax earlier.
The Let Property Campaign is expected to run until summer 2015.
The targets are property people who may have sold or gifted property without paying capital gains tax and landlords currently renting out homes who owe income tax.
“Property owners who fail to get in touch may risk a criminal investigation and some serious penalties,” said an HMRC spokesman.
“The message to property owners who have not paid their tax is HMRC knows about you and will make sure you pay the right amount of tax on rental profits or chargeable gains – and if you don’t tell us the penalties will be tougher if we have to come after you.”
Go to the HMRC web site for more about the Let Property Campaign