Hundreds of thousands of landlords across the UK could face an HMRC investigation as the Revenue closes in on undeclared income.
The Daily Mail reports that HMRC is preparing a new clampdown on landlords who have not declared their rental income. While there are an estimated 1.4 million landlords in the UK, the paper reports that just 500,000 have registered with HMRC – leaving a shortfall of some 900,000.
Last year the Revenue launched the Let Property Campaign, offering landlords a final chance to get their tax affairs in order. Landlords who declare income under the scheme may receive reduced penalties, and can escape the risk of prosecution.
Property tax advisors Rita4Rent report that HMRC is ramping up its activities under the scheme, which is slated to last until April 2015. HMRC estimates that some £550 million in tax is underpaid by landlords every year.
Announcing the scheme in October, Lib Dem Chief Secretary to the Treasury Danny Alexander said that landlords must “pay up or face the consequences.”
“Over the last decade rents have risen twice as fast as wages,” Mr Alexander said, “stretching family budgets. But some landlords still failed to pay the right tax due on the rents they receive. I’m talking about landlords who own more than one property, who rent to students, people with holiday lets, and those who let houses in multiple occupation.”