Landlords at risk from HMRC taskforce
Landlords are in the firing line following the establishment of a new HMRC taskforce.
The specialist team will target landlords in the South East of England – and will particularly focus on so-called ‘accidental’ landlords.
It is the latest in a series of taskforces set up by the Revenue to target specific areas in which it believes there is “evidence of a high risk of tax evasion.” The first such taskforce, which targeted restaurateurs, was set up in May 2011.
Accidental landlords are those who have been forced into renting out their properties having found themselves unable to sell. Recent figures from the National Landlords Association suggest that some 43 per cent of landlords did not intend to enter the rental market when they bought the first property that they subsequently came to let.
Many of those accidental landlords have limited knowledge of the legal requirements that their role entails, and there is concern that some are failing to declare their full rental income.
Ray Coman, of London tax accountants Coman & Co, said landlords need to be aware of their record-keeping obligations.
“You’re required to keep your books and records for six years after the end of each accounting period, in the event of an investigation,” he said.
“HMRC have said that you can keep this in an electronic format, so it can be scanned or saved as a PDF document.”
The Revenue takes some £1.8 billion in tax revenue from rental income every year, but it is thought that a further £550 million goes uncollected.
HMRC is targeting those who fail to declare rental income. It hopes to make some £4 million from its efforts.